A highly anticipated report released by the Labor Department on Thursday showed a modest decrease in U.S. consumer prices in the month of December.
The Labor Department said its consumer price index edged down by 0.1 percent in December after inching up by 0.1 percent in November. Economists had expected consumer prices to come in unchanged.
The report also showed the annual rate of consumer price growth slowed to 6.5 percent in December from 7.1 percent in November, in line with expectations. The annual growth was the slowest since October 2021.
"Overall, this latest report adds more weight to our view that CPI inflation will fall more rapidly than the Fed expects this year," said Paul Ashworth, Chief North America Economist at Capital Economics.
"But the Fed isn't going to stop raising interest rates until it sees accompanying evidence of an easing in labor market conditions and wage growth," he added. "It will be a couple more months before that evidence is also irrefutable."
The modest monthly decrease in consumer prices came as gasoline prices plummeted by 9.4 percent in December after slumping by 2.0 percent in November.
The nosedive by gasoline prices helped offset a continued increase in prices for shelter, which advanced by 0.8 percent in December after climbing by 0.6 percent in November.
The report showed food prices also rose by 0.3 percent in December, reflecting higher prices for both food at home and food away from home.
Excluding food and energy prices, core consumer prices rose by 0.3 percent in December following a 0.2 percent uptick in November. The increase matched economist estimates.
The annual rate of core price growth slowed to 5.7 percent in December from 6.0 percent in November. The year-over-year growth was also in line with expectations.
The monthly increase in core prices reflected higher prices for shelter, household furnishings and operations, motor vehicle insurance, recreation, and apparel indexes.
Meanwhile, prices for used cars and trucks and airline fares were among those that decreased over the month.
The Labor Department is scheduled to release a separate report on producer price inflation in the month of December next Wednesday.
For comments and feedback contact: editorial@rttnews.com
Business News