Inflation’s Warm-Up Act

Inflation will probably cool next year, but it may still be plenty warm.

Right now, inflation is running hot. The Labor Department on Friday reported that consumer prices rose 0.8% in November from October, putting them 6.8% above their year-earlier level, marking the largest year-on-year increase since 1982. A chunk of that was from fuel costs, which have recently started slipping, but core prices, which exclude food and energy prices to better capture inflation’s underlying trend, were still up 4.9% on the year.