US inflation unexpectedly cooled in November, according to a delayed report, although economists warned against reading too much into the numbers because of gaps in the data.

The Consumer Price Index rose 2.7% in November over the past 12 months, down from 3% in September and below expectations of a 3.1% rise, the Bureau of Labor Statistics said Thursday.

Core CPI – which excludes volatile food and energy prices – rose 2.6% over the same period, far below estimates of a 3% jump.

For some, the numbers eased fears that President Trump’s tariffs were poised to stoke inflation this fall as retailers and consumers alike entered the thick of the holiday shopping season.

“This report is clear: prices are steady and wages are beating inflation,” the White House Council of Economic Advisers said in a social media post, nodding to lower inflation rates on airfares and hotels.

The Dow Jones Industrial Average added 65 points, or 0.1%, while the S&P 500 and Nasdaq rose 0.8% and 1.4%, respectively.

The odds of an interest-rate cut at the Fed’s January meeting ticked up just slightly following the inflation report, but the vast majority are still betting on policymakers holding rates, according to CME FedWatch.

November’s figures were the first available since September after a government shutdown disrupted data gathering. While they were lower, some economists noted that workarounds to address the gaps could have depressed the numbers.

All of the data, for example, was collected after the government reopened in mid-November, meaning “Black Friday” sale prices weighed more heavily than usual.

“I think it would be unwise to dismiss the results entirely, but I also believe it would be rash to take them at face value,” Stephen Stanley, chief US economist at Santander US Capital Markets LLC, said in a note.

November’s inflation report did not include monthly figures, since the BLS canceled the October inflation report last month as the record-breaking government shutdown prevented the collection of data.

Fed Chairman Jerome Powell warned last week that upcoming economic data “may be distorted” by the shutdown and should be viewed with a “somewhat skeptical eye.”

But the cooler-than-expected figure gave some investors hope that the Fed will continue to ease monetary policy.

The Federal Reserve last week slashed interest rates for a third time this year on price pressures, even as it contends with a weakening labor market.

While central bankers have prioritized their goal of taming inflation to 2%, Powell has maintained that President Trump’s tariffs will likely only cause a one-time shock to prices.

Questions remain, however, around the size of that price jolt, since many businesses have been swallowing added costs for months and stockpiles of pre-tariff inventory are only just starting to run dry.

November’s inflation report presented another mixed bag of data, as prices on tariff-sensitive goods like furniture and bedding rose 3% over the year, but others like appliances and apparel jumped just 0.5% and 0.2%, respectively.

“It’s really tariffs that are causing most of the inflation overshoot,” Powell said last week, when asked about what is halting progress on lowering inflation.

Meanwhile, the jobs report released earlier this week showed hiring remained relatively steady in November – but the unemployment rate jumped to 4.6%, its highest level since September 2021.

“We likely have seen the last interest rate move last week from Chairman Powell’s Fed as they now take a pause to assess if the inflation picture continues to improve and if employment continues to weaken,” Skyler Weinand, chief investment officer at Regan Capital, said in a note Thursday.

Powell’s term expires in May 2026, and Trump is currently assessing candidates to take on the role – reportedly a neck-and-neck race between National Economic Council Director Kevin Hassett and former Fed Governor Kevin Warsh.

One of the main drivers in November’s inflation reading is energy prices, which rose 4.2% over the past 12 months. Fuel oil jumped 11.2%, while gasoline ticked up only 0.9%.

Electricity prices rose a whopping 6.9% and utility gas service increased 9.1%.

Used cars and trucks also drove inflation, rising 3.6% in November over the past 12 months. New vehicles rose only 0.6% as automakers have tried to absorb the majority of tariff costs.

The lingering effects of a pandemic-era shortage, and possibly the impact of consumers rushing to buy vehicles ahead of Trump’s tariffs earlier this year, have pushed prices on used cars nearly as high as new vehicles.

Americans are also likely feeling the effects of inflation at the grocery store.

Coffee prices jumped 18.8% over the past year, doubly hit by volatile weather that has reduced crop yields and steep tariffs on major coffee producers like Brazil and Vietnam.

Uncooked ground beef rose 14.9% as the US faces a record low cattle supply.

Eggs, meanwhile, are down 13.2% as flocks recover from detrimental bird flu outbreaks that started in 2022.