November Inflation Below Estimates, Weak Jobs Report: Market Impact Analysis

On December 18, 2025, the U.S. Bureau of Labor Statistics released a delayed November Consumer Price Index (CPI) report showing 2.7% year-over-year (YoY) inflation, below the 3.1% consensus estimate [1][2][3][4]. Core CPI, which excludes volatile food and energy prices, also slowed to 2.6% YoY, down from 3.0% in September. Concurrently, the November jobs report revealed a weakening labor market: the unemployment rate rose to 4.6% (a 4-year high), with 64,000 jobs added in November following a loss of 105,000 jobs in October [5][6].

The CNBC Morning Brief segment analyzed these two reports, noting the mixed nature of the news. Lower-than-expected inflation is typically positive for markets, as it raises expectations of Federal Reserve interest rate cuts. However, the weak jobs report signaled a cooling labor market, sparking recession concerns. This combination led to modest declines in major U.S. market indices: the S&P 500 fell 0.05%, NASDAQ 0.02%, and Dow Jones Industrial Average 0.31% [0].

Notably, the CPI report faced methodological criticism due to government shutdown-related data collection delays and carry-forward pricing issues, casting doubt on its reliability [7]. Economists emphasized that future months’ data will be necessary to confirm if inflation is truly cooling or if the November figures are distorted.

1. Mixed economic signals create market ambiguity
   : The divergence between positive inflation news (supporting rate cuts) and negative labor market trends (raising recession fears) prevented a clear market rally or sell-off, resulting in muted index movements.
2. Data reliability concerns add uncertainty
   : The CPI report’s methodological flaws mean investors cannot fully trust the current inflation trend, increasing volatility risk as future data releases are awaited.
3. Labor market weakness outweighs inflation optimism
   : Despite lower inflation, the rising unemployment rate and net job losses in October raised concerns about consumer spending, a key driver of economic growth.

• Reaccelerating inflation
  : If the November CPI data’s methodological flaws are corrected in subsequent reports, inflation may prove higher than current estimates, delaying Fed rate cuts [7].
• Recession pressure
  : A weakening labor market could lead to reduced consumer spending, slowing economic growth and negatively impacting corporate earnings [0].
• Data-related volatility
  : The government shutdown’s impact on economic data collection could cause inconsistent reports, making it challenging for investors to interpret trends [7].

• Fed rate cuts
  : If inflation stays low (and future CPI data confirms the trend), the Fed may implement rate cuts in 2026, supporting market valuations [1][3].
• Attractive asset valuations
  : Muted market movements following the mixed reports may present selective opportunities for long-term investors.

The November CPI report showed 2.7% YoY inflation (below consensus) and core CPI 2.6% YoY. The jobs report revealed 4.6% unemployment (4-year high), 64k November jobs added, and 105k October jobs lost. Major market indices had slight declines (S&P -0.05%, NASDAQ -0.02%, Dow -0.31% [0]). The CPI report has methodological concerns due to government shutdown delays. The mixed data creates uncertainty about future Fed policy and economic trends, emphasizing the need for clear, reliable subsequent data releases.