USA: inflation drops to 6.5% in annual calculation

The rise in US consumer prices eased again last month, raising hopes that the economy’s grip on inflation will continue to ease this year and possibly require less drastic action by the Federal Reserve to rein it in. .

Inflation fell to 6.5% in December compared to 12 months earlier, the government reported Thursday, in the sixth straight year-on-year slowdown. On a monthly basis, prices actually fell 0.1% from November to December, the first such decline since May 2020.

The reading adds to growing signs that the worst inflation in four decades is gradually easing.

Still, the Federal Reserve does not expect inflation to slow enough to approach its 2% target until well into 2024. The central bank is expected to raise its benchmark rate by at least a quarter point when it meets. at the end of the month.

Despite gradually slowing, inflation remains a painful reality for many Americans, especially given the rise in food, energy and rent prices over the past 18 months.

For now, inflation is falling, including the national average price of a gallon of gasoline from a peak of $5 in June to $3.27 as of Wednesday, according to the AAA auto association.

Supply chain delays that previously inflated the cost of products have been largely resolved. Consumers have also spent less on physical goods and have opted more for services, such as travel and entertainment.

As a result, the cost of goods, including used cars, furniture and clothing, has fallen for two consecutive months.

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