US Inflation Eased in November

The US government released data on the smallest annual increase in nearly a year, meaning US consumer inflation eased in November.

Policymakers are looking into monthly inflation reports for consumer price moderation as surging costs of living force households to spend from their savings.

According to Labor Department figures, the consumer price index (CPI) which measures inflation went down to 7.1% compared to the 7.7% rate in October.

However, the overall percentage is still about three times the pre-pandemic pace.

The latest data showed prices hiked to 0.1% from October to November, a smaller increase coming from a 0.4% price hike.

President Joe Biden said the figures gave “a reason for some optimism for the holiday season and I would argue for the year ahead.”

The Federal Reserve continued its tightening policy to lower demand. The lower inflation rate will likely result in an easing in the Fed’s aggressive campaign and is expected to implement a smaller rate hike.

Economist Rubeela Farooqi of High-Frequency Economics explains that consumer inflation remains much higher than the Fed’s long-term goal of 2%, even if prices are “moving in the right direction.”

But “further sustained improvement” over the coming months could allow the Fed to slow its pace of rate hikes more, she added.

Farooqi further warns that while good prices are easing, they will still contribute heavily to CPI changes and a reverse in the trends will take time.

Source: ABS-CBN