Inflation gave a new breath to household budgets in the United States, settling at 6.5% and closing the year at its lowest level in the last 12 months, but still uncomfortably high for the Federal Reserve’s (Fed) targets.
This Thursday’s report from the Bureau of Labor Statistics (BLS) confirms that prices are cooling and that the Fed’s strategy of controlling inflation through its interest rate is working.
With the data for December, the Consumer Price Index (CPI) marks its sixth month in a row with falls, since the indicator had its worst moment in june from last year by climbing up to 9.1% in its annual comparison.
Since that moment, when the average price of gasoline revolutionized inflation upon reaching $5 dollars nationwideprices have done nothing more than cool down, mainly those of products.
However, consumers in the country continue to pay uncomfortably high prices and this could send a signal to the Fed that its task of bringing inflation back to the 2% target is not done.
The last month of the year closed with a new drop in the CPI, in the midst of a long Christmas shopping season which was disappointing for some retailers and in which consumers resorted to credit to cover their expenses and gifts.
In year-on-year terms, inflation grew to 6.5% from 7.1% last November and in line with the forecast made by economists consulted by Dow Jones, in the day prior to the BLS report.
In the month-to-month comparison, inflation during December decreased by 0.1%, from 0.1% last November, according to the CPI report for the last month of 2022.
Meanwhile, core inflation, which excludes fuel and food prices which are more volatile, increased 5.7%, from 6% last November, in annualized terms.
While in its monthly comparison, core inflation in December grew 0.3% from 0.2% in November, according to the BLS report.
During December, housing prices continued to drive price increases, according to the CPI report.
Energy prices during December stood at 7.3% in their annual measurement, from 13.1% last November.
Meanwhile, the gasoline index fell 9.4% during December and 12.5% before seasonal adjustment, according to the BLS report.
According to the CPI report, the prices of goods and services that most limited consumer spending were: housing, household items, motor vehicle insurance, recreation, and clothing.
One of the most sensitive indicators, that of housing, had an increase of 0.8% during December; while the rental price index had an increase of 0.8%, in this same period.
Meanwhile, food showed an increase of 0.3% in its monthly comparison, according to the report on Thursday.
On the contrary, with the increases in December, products and services whose prices fell the most were: used cars, trucks and air fares.
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Source: La Opinion
