The Breakdown:

There was a feast of financial news last week! Let’s kick things off with some inflation news. Personal Consumption Expenditures (PCE) came in 0.1% higher in November, with an annual decrease of 0.6%. Core PCE showed a less impressive decrease from 5% to 4.7% after removing the volatile food and energy prices. The good news is that inflation is heading in the right direction! If the monthly readings continue to stay low, we’ll see the overall inflation numbers continue to drop.

The measure of consumer-level inflation, the Consumer Price Index (CPI), showed a decrease in inflation of 0.6% to 7.1%. Core CPI, which removes the prices of food and energy, also resulted in an annual decrease of 6%. It's important to note that the cost of shelter makes up almost 40% of the Core CPI increase, playing a big role in the CPI report.

More real-time data shows that rental prices are starting to level out. Apartment List, for example, releases a National Rent Report which shows that prices of rentals are up 4.7% through November, which is much lower than the 18% rise this time last year. We'll likely see the effect of these moderated shelter costs in the coming inflation reports.

There will be plenty of market news this week prior to the Christmas holiday weekend. Next week, we'll break down the Housing Market Index and Existing Home Sales data. Stay tuned.

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