‘I am more confident’ despite rise in US inflation

New Yorker Josh Kerban kept careful track of his gasoline purchases, trying to stretch his money by only partially filling the tank.

However, these days he is filling it to the top.

The decision is indicative of the increased scope for financial relief being felt by millions of Americans, as gasoline prices have fallen to their lowest level in three years, helping to control the rising cost of living.

Official data showed US inflation – the rate at which prices rise – rose slightly to 2.7% last month. Despite the increase, prices are rising at a much slower pace than in June 2022, when Russia’s invasion of Ukraine roiled global oil markets and sent fuel prices soaring.

Although progress has been visible in economic data for months, economic discontent remains high, as price increases in other sectors such as housing have hampered the broader recovery.

The issue played a key role in the US election, helping Donald Trump win re-election to the White House last month.

Now, however, polls show that opinions about the economy are finally beginning to brighten, driven by increased confidence among Mr. Kerben, Trump’s supporters, following the former president’s election victory.

“Compared to two months ago, I would say I feel more confident,” the 36-year-old property manager said. “Hopefully Trump will do something.”

The irony is that the improvement in sentiment is occurring at the same time that progress on price control appears to have stalled.

An inflation rate of 2.7% was expected for November.

But in October it was above 2.6%, which is the highest rate since july.

Gas prices – although down 8.1% compared to 2023 – rose 0.6% from October, while grocery prices rose 0.5% during the month.

Prices of used cars, home furnishings, and medical care also increased.

The situation has raised questions about how Trump will deliver on his promises to lower prices for Americans — and what the U.S. central bank, which wants to see inflation rates around 2%, should do next.

“Inflation in the US is increasingly coming into focus,” said Lindsay James, investment strategist at Quilter Investors.

“This is partly due to the lack of progress made over the past three months, but also due to concerns that higher US government spending and the introduction of Trump’s tariffs could create a backdrop for higher inflation.”

The US central bank lowered interest rates for the first time in more than four years in September, citing progress in price stabilization.

Many analysts still expect officials to announce another cut in interest rates at their meeting this month, but they warned that rates next year are likely to remain higher than before unless sectors outside of gasoline remain stable. The increase in prices does not reduce significantly.

It’s a conclusion that will come as no surprise to Americans like Grier Bowen.

The 48-year-old was diagnosed with cancer in 2017 and now relies on disability payments from the government, which she said have not continued because expenses have increased in recent years.

Although lower gasoline prices have helped the situation, he said the savings are not enough to offset higher costs elsewhere.

“You may be saving here, but now you have to reallocate it elsewhere,” he said.

Ms Bowen said she thought Trump would try to change things but she was not yet convinced he would bring about change for the better.

“It is yet to be decided,” he said.