Life was slightly cheaper for Americans in December than it was in November. According to the US Department of Labour reports, inflation in the closing month of 2022 was negative on a monthly basis.
Compared to a year earlier, the cost of living rose by 6.5 percent, which is the lowest level in more than a year.
The fact that inflation is much lower is due to the fall in energy prices. This made petrol a lot cheaper. But electricity did become more expensive compared to November, just like gas. Food also continued to become more expensive, but much more slowly than earlier in the year.
The lower inflation may mean that the Federal Reserve will be able to raise interest rates more slowly than during the past series of policy meetings.
To check whether inflation is under control, the central bank also looks at inflation without the volatile energy and food prices. This is called core inflation and reflects the underlying trend. It also fell to 5.7 percent on an annual basis in December. In November, it was still 6 percent.
In any case, the Fed is not yet done with the rate hikes. However, more and more policymakers are calling for a subsequent increase of 0.25 percentage points.
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