By Alicia Wallace, CNN

(CNN) — The Federal Reserve’s preferred inflation gauge moved slightly higher in November — but not as much as economists were expecting, an indication that price hikes aren’t accelerating in a worrisome fashion.

Still, cost of living concerns are growing as 2025 approaches and uncertainty widens about potential inflationary global events and domestic policies.

The Personal Consumption Expenditures price index rose 2.4% in November from the year before, heating up from the 2.3% increase notched in October, according to new Commerce Department data released Friday.

On a monthly basis, prices rose just 0.1%, a slower pace of growth than the 0.2% increase seen in October. Economists expected a 0.2% monthly increase, according to FactSet.

An increase in the annual rate of inflation was fully expected because of comparisons to a year-ago period when inflation cooled rapidly as well as some hurricane- and holiday-driven price hikes considered to be fleeting.

However, Friday’s reading came in even better than the 0.2% monthly gain and 2.5% annual increase economists were expecting, according to FactSet consensus estimates.

Plus, the closely watched “core” measure of inflation, which excludes the more-volatile food and energy categories, rose at the slowest monthly pace since May and resulted in the annual rate holding steady at 2.8%, Commerce Department data shows.

“The overall picture is still very much intact,” Lauren Saidel-Baker, an economist at ITR Economics, told CNN on Friday. “We are in a disinflationary environment that’s been going on since, really, 2022.”

A ‘spooked’ Fed and what that means for future rate cuts

Inflation has cooled substantially this year but has moved sideways in recent months, prompting the Fed to take a more cautious approach to rate cuts in the coming year.

“They’ve been a little bit spooked by somewhat higher numbers in the core [inflation readings] over the past few months,” Luke Tilley, chief economist at Wilmington Trust, told CNN. “I think they’re guarding against the risk that it could reaccelerate.”

Fed Chair Jerome Powell said Wednesday — when the central bank cut rates by a quarter point — that while there’s been “significant progress” on inflation, uncertainty also is growing.

In addition to ongoing concern about volatility in the Middle East, most economists caution that President-elect Donald Trump’s policy proposals around tariffs, immigration and taxes could be inflationary.

San Francisco Fed President Mary Daly said Friday that she didn’t give those potential policies much consideration when she voted for a quarter-point cut earlier this week.

“It’s always about the data for me,” she said in a Bloomberg TV interview on Friday. “We don’t know what the incoming administration is going to do.”

On the inflation front, she said data has been “coming in a little slower,” but she wouldn’t categorize it as “sticky or stalled.”

Cleveland Fed President Beth Hammack, who was the sole dissenter at the Fed’s policy meeting earlier this week, favoring a pause, said Friday she needs to see “further evidence that inflation is resuming its path to our 2% objective.”

Until then, “I believe that monetary policy will need to remain modestly restrictive for some time,” she said in a statement released Friday morning.

“The economy’s momentum and recent elevated inflation readings caused me to revise up my inflation forecast for next year,” Hammack added.

Tilley, however, believes the Fed could end up cutting rates more than its members are anticipating right now. A big reason for that: The job market and consumer spending aren’t as strong as they seem, Tilley cautioned.

“They are comfortable with the labor market, and they’re really concerned about inflation,” Tilley said. “We are comfortable with inflation and really concerned about the labor market.”

Risks of consumer spending sputtering out?

The PCE price index is part of the Commerce Department’s monthly Personal Income and Outlays report, which includes comprehensive data on how Americans earn, spend and save.

In November, a month that featured a late official kick-off to the holiday shopping season, consumer spending rose 0.4%, which was less than the 0.5% hike economists were expecting. Factoring inflation into the equation, spending rose 0.3%.

Income growth, at 0.3%, was far less robust than the 0.7% spike in October. And the personal saving rate (calculated as the percentage of money saved from income excluding taxes) ticked down by a tenth of a percentage point to 4.3%, Friday’s report showed.

While not lackluster by any means — US gross domestic product growth is chugging along at a 3.1% annualized clip — Tilley sees some signs that the consumer-driven engine behind economic growth is starting to sputter.

“For all that talk about consumer spending being so strong, we’re getting a really, really high contribution from things that don’t get you excited thinking the consumer is in a good place,” he said, referencing how consumer spending shook out in the third quarter. “Housing, utilities, medical and nonprofits are giving more than twice the contribution over the past year to consumer spending than they typically do.”

“It doesn’t paint a picture of people out spending,” he added, noting how retailers such as Target and The Home Depot have reported step-backs in spending and others, notably Walmart, have indicated consumers are increasingly seeking out deals.

The labor market is slowing, hiring activity is drying up, and people are staying on the unemployment rolls for longer, the latest employment snapshot showed. That could set the stage for a further pullback in spending, he said.

For now, sentiment is holding up: Americans’ attitudes toward the economy have steadily improved over the past few months.

The University of Michigan’s Index of Consumer Sentiment jumped in December for the fifth consecutive month, reaching its highest level since April, according to a final reading released Friday. Republicans have especially felt more upbeat since Trump’s win.

But jitters about the economy’s future remain, particularly the possibility of prices picking up under Trump. Some Americans stepped up their spending on durable goods in anticipation of those prices rising in the future, according to the survey.

“Buying conditions exhibited a particularly strong 32% improvement, primarily due to a surge in consumers expecting future price increases for large purchases,” Joanne Hsu, the survey’s director, said in a release.

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CNN’s Elisabeth Buchwald and Bryan Mena contributed to this report.