US inflation subsides further
US consumer prices rose less than expected for a second straight month in November, resulting in the smallest annual increase in inflation in nearly a year and giving the Federal Reserve cover on Wednesday to start scaling back the size of its interest rate increases.
The consumer price index readings last month reflected declines in the costs of gasoline, healthcare and used cars and trucks, the Labor Department reported on Tuesday. But Americans still faced higher prices for food and rental housing.
The report, which also showed underlying inflation posting its smallest monthly gain in more than a year, was published as officials at the U.S. central bank were gathering for their final two-day policy meeting of the year.
The Fed - in the midst of its fastest rate-hiking cycle since the 1980s - is expected to lift its benchmark overnight interest rate by 50 basis points on Wednesday, snapping a string of four straight 75-basis-point increases.
"It looks increasingly like inflation has reached a turning point where price increases are falling or little changed for many categories of goods and services that consumers buy," said Christopher Rupkey, chief economist at FWDBONDS in New York.
"For the first time we can say the Fed is winning its war on inflation."
The Fed is expected to lift its benchmark overnight interest rate by 50 basis points on Wednesday
The consumer price index increased 0.1 per cent last month after advancing 0.4 per cent in October. Gasoline prices dropped 2.0 per cent after rising 4.0 per cent in October. The cost of natural gas fell as did prices for electricity.
But food prices climbed 0.5 per cent after rising 0.6 per cent in October. The cost of food consumed at home increased 0.5 per cent, driven by rises in prices of fruits and vegetables, cereals and nonalcoholic beverages. But meat, fish and eggs cost less last month.
Economists polled by Reuters had forecast the CPI would gain 0.3 per cent. In the 12 months through November, the CPI climbed 7.1 per cent. That was the smallest advance since December 2021, and followed a 7.7 per cent rise in October. The annual CPI peaked at 9.1 per cent in June, which was the biggest increase since November 1981.
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