Business
US consumer inflation jumps more than expected to 3.4 per cent
WASHINGTON: Consumer inflation in the United States rose more than anticipated in December, government data showed Thursday, although underlying pressures still appear to be ebbing.
The Department of Labor’s consumer price index (CPI), a key measure of inflation, was up 3.4 percent from a year ago and higher than November’s figure.
However, a “core” metric that strips out volatile food and energy prices cooled to 3.9 percent in the last month of 2023.
While analysts do not expect Federal Reserve officials to base their rate-setting off of one month’s data, accelerating inflation could add pressure to the central bank.
Policymakers rapidly lifted interest rates beginning in early 2022 and have held them at a high level, seeking to ease demand and sustainably lower inflation.
The aim is to ease demand by making it more appealing to save rather than spend.
Despite the CPI uptick in December, inflation has come down significantly from the 9.1 percent peak in June 2022, while consumer spending and the jobs market remained resilient.
This has fueled hopes of a so-called “soft landing” for the world’s biggest economy, where inflation cools without a damaging recession.
From November to December, CPI rose 0.3 percent, up from the prior month as well.
The Department of Labor’s consumer price index (CPI), a key measure of inflation, was up 3.4 percent from a year ago and higher than November’s figure.
However, a “core” metric that strips out volatile food and energy prices cooled to 3.9 percent in the last month of 2023.
While analysts do not expect Federal Reserve officials to base their rate-setting off of one month’s data, accelerating inflation could add pressure to the central bank.
Policymakers rapidly lifted interest rates beginning in early 2022 and have held them at a high level, seeking to ease demand and sustainably lower inflation.
The aim is to ease demand by making it more appealing to save rather than spend.
Despite the CPI uptick in December, inflation has come down significantly from the 9.1 percent peak in June 2022, while consumer spending and the jobs market remained resilient.
This has fueled hopes of a so-called “soft landing” for the world’s biggest economy, where inflation cools without a damaging recession.
From November to December, CPI rose 0.3 percent, up from the prior month as well.
