U.S. inflation came in at 6.5 percent in December compared to the year before, marking the sixth straight month of decline since the June peak of 9.1 percent, reports The Wall Street Journal.
The consumer price index, a measure of what consumers pay for goods and services, fell by 0.1 percent in December compared to November, largely due to falling energy prices but also due to slowed increases in food prices. During the same period, the core CPI, which excludes both energy and food, rose by 0.3 percent.
The latest inflation data suggests that U.S. economic activity calmed at the end of 2022. The cooling was attributed to the decline in domestic imports and exports between October and November coupled with a decline in retail and home sales, and manufacturing output, according to the report.
Jamie Dimon, co-chief executive at JP Morgan Chase said on Tuesday that the Fed may need to lift its federal funds rate to six percent to tame inflation.
“Inflation won’t quite go down the way people expected… But it will definitely be coming down a bit," he said.
Declining gas prices have alleviated logistics pressures from many businesses. The national average of $3.27 on Wednesday is down from its June peak of $5.02.
“Logistics prices have also slowed materially, shipping costs are back to where they were pre-Covid,” said Jake Oubina, senior economist at Piper Sandler. “These were all inputs that a lot of retailers had to pass through to consumers, and the alleviation on the cost side is creating the wherewithal to discount more aggressively as we head into 2023.” Full Story (Subscription Required)
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