US inflation rises 0.5% year-on-year in November, in line with forecasts

US inflation rose 0.5% in November from a year ago, matching analysts' estimates and marking an improvement from the previous month's 0.2% increase.

The Bureau of Labor Statistics said a decline in energy and food prices continued to hold back inflation.

Excluding the two volatile components, the consumer price index climbed 2% year-on-year in November as expected, following a 1.9% gain a month earlier.

Shelter, medical care, airline fares, new vehicles, and tobacco were among the indexes that rose in November.

However, CPI fell to 0% in November on a month-on-month comparison, after a 0.2% rise in October, meeting forecasts.

Excluding food and energy, CPI rose 0.2% in November from a month ago, the same as October and in line with analysts' expectations.

James Hughes, chief market analyst at GKFX, said the improvement in year-on-year inflation paves the way for the Federal Reserve to raise interest rates on Wednesday when the central bank wraps up its two-day policy meeting.

"...today was all about not upsetting the Fed’s preparations, and it seems we have come through unscathed," he said.

The Federal Reserve, which is targeting 2% inflation, is widely expected to raise rates on Wednesday for the first time in nearly a decade by 25 basis points.