November 2025 CPI Report: Downward Bias Claim Amid Shutdown-Disrupted Data

This analysis is based on the CNBC video [4] where EY-Parthenon’s chief economist Gregory Daco discussed the delayed November 2025 CPI report, released by the U.S. Bureau of Labor Statistics (BLS) on December 18, 2025. The report followed a 43-day government shutdown (Oct 1–Nov 12, 2025)—the longest in U.S. history—which canceled the October CPI and disrupted BLS data collection timelines [3]. The headline CPI rate was 2.7% annual, below both the 3.1% consensus expectation and September 2025’s 3.0% reading [1][2]. The BLS had warned the report would exclude 1-month percent changes due to missing October data [3], and Daco’s claim of a “downwardly biased” inflation view aligns with this warning, as partial November data collection post-shutdown could skew estimates [4].

U.S. equity markets showed muted negative reactions on the report’s release: the S&P 500 declined by 0.05%, the NASDAQ by 0.02%, and the Dow Jones Industrial Average by 0.31% [0]. This limited movement reflects that investor optimism over the lower-than-expected inflation figure was offset by concerns about the report’s credibility, consistent with Daco’s bias claim and broader economist warnings [2]. The report also carries implications for Federal Reserve monetary policy: as of December 2025, the Fed had projected one rate cut for 2026; if the 2.7% CPI figure understates actual inflation, the Fed may face pressure to reevaluate these expectations [3].

1. Systemic data credibility risk
   : The prolonged government shutdown has eroded confidence in U.S. government economic statistics, which are foundational for market decisions and policymaker guidance. The BLS’s cancellation of the October CPI and warnings about the November report’s limitations highlight vulnerabilities in data collection processes [3].
2. Missing core CPI metric
   : A critical information gap exists as the November core CPI (excluding volatile food and energy prices)—the Fed’s preferred gauge for policy decisions—has not been publicly confirmed [1][2]. This absence further complicates policy analysis.
3. Balanced market sentiment
   : The muted market reaction demonstrates a shift in investor priorities from immediate inflation surprises to long-term data integrity, indicating that credibility now weighs heavily alongside headline figures.

• Policy misguidance
  : Inaccurate CPI data could lead the Fed to make monetary policy decisions that either prolong inflation or hinder economic stability, as policymakers rely on reliable inflation metrics to guide rate adjustments [3].
• Credibility erosion
  : Ongoing concerns about the reliability of U.S. economic data may increase market volatility over time, as investors struggle to base decisions on trusted information [0].
• Market reversal risk
  : When revised CPI data or delayed Personal Consumption Expenditures (PCE) reports (the Fed’s preferred inflation gauge) are released, markets may react sharply to corrections of the initial 2.7% figure [3].

• Improved data processes
  : The shutdown’s impact on economic data may prompt policymakers to strengthen data collection and reporting mechanisms, reducing the risk of future disruptions.
• Long-term value identification
  : Investors with a long-term perspective may find value in markets that overreact to temporary data distortions, as more accurate information becomes available.

• November 2025 headline CPI: 2.7% annual (below consensus 3.1%) [1][2].
• Government shutdown duration: 43 days (Oct 1–Nov 12, 2025) [3].
• December 18, 2025 market reaction: Muted declines in major U.S. equity indices [0].
• EY-Parthenon’s claim: The CPI report provides a downwardly biased view of inflation due to shutdown-related data gaps [4].
• Critical information gaps: Core CPI details, Daco’s specific bias mechanisms, U.S. Treasury yield movements (bond market reaction), and full economist consensus on the bias magnitude.
• Factors to monitor: BLS revisions to the November CPI, release of delayed PCE data, additional commentary from Daco and other economists, and Fed policymakers’ public statements about the report’s reliability.