© Reuters
Investing.com — rose by 0.2% as expected in December, a rate that, if sustained, many economists believe could help cool inflation back down to the Federal Reserve’s target.
When compared to the year-ago period, the so-called “core” personal consumption expenditures price index, which excludes volatile items like food and fuel, increased by 2.9% last month. The uptick was a deceleration from 3.2% in November, and slower than estimates of 3.0%.
This indicator — widely known as the Fed’s preferred gauge of inflation — suggests that price gains are continuing to ease back down to the central bank’s 2% year-on-year goal.
The overall measure edged up by 0.2% month-on-month, after it had dipped for the first time in over three and a half years in November. Annually, it rose by 2.6%, matching the pace of the previous month, as an uptick in food prices offset a decrease in energy costs. Both numbers were in line with expectations.
Signs that once-elevated inflation is being quelled also persuaded Americans to open their wallets during the holiday season. Consumer spending, which accounts for more than two-thirds of overall U.S. economic activity, expanded by 0.7% compared to the prior month, up from November’s mark of 0.4%.
Coupled with Thursday’s solid gross domestic product figures, the data could factor into how the Fed approaches potentially lowering interest rates down from more than two-decade highs in the coming months. Late last year, policymakers were expected to roll out cuts as early as March, but easing inflation and resilient growth have pushed back these projections.
This is a developing story. Please check back later for updates.
