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The SPDR S&P 500 SPY is moving higher Tuesday morning after the Labor Department reported a 7.1% year-over-year increase in the consumer price index for November.
What Happened: The headline CPI rose 7.1% in November, down from 7.7% in October, according to data from the U.S. Bureau of Labor Statistics.
The November CPI reading came in below average economist estimates of 7.3%.
On a month-over-month basis, CPI was up 0.1% versus average economist estimates for a 0.3% jump.
Core inflation, which excludes volatile food and energy prices, was up 6% in November, below average economist estimates for a 6.1% gain.
The Labor Department said energy prices were down 1.6% in November, while food prices climbed 0.5%.
Why It Matters: Tuesday’s highly anticipated CPI inflation reading comes just a day ahead of the Federal Reserve’s final meeting of the year.
The Fed has issued a series of four consecutive 0.75% rate hikes leading up to Wednesday’s meeting. Most expect the Fed to opt for a smaller 0.5% rate increase following a series of encouraging data sets in recent weeks. Tuesday’s CPI is another step in the right direction.
At the central bank’s last meeting, Fed Chair Jerome Powell said there is still significant uncertainty around the level of interest rates that will be sufficiently restrictive to bring inflation down to its 2% goal.
“The historical record cautions strongly against prematurely loosening policy. We will stay the course until the job is done,” Powell said.
SPY Price Action: The SPY was up 2.03% at $407.05 at time of publication, according to Benzinga Pro.
Photo via Shutterstock.
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Image and article originally from www.benzinga.com. Read the original article here.