2023-12-23 02:39:23
The Federal Reserve’s inflation index fell 0.1 percent in November, the first monthly decline in overall prices by that measure in more than three years, according to the website.Axios“
The data released by the Commerce Department is the latest sign of slowing inflation, which has been caused by strong consumer spending and rising incomes.
US President Joe Biden described the news as an “important milestone,” but added that “the work is not over yet.”
The personal consumption expenditures price index rose 2.6 percent compared to the same month last year, approaching the 2 percent sweet spot that Fed officials target. In October, it rose by 2.9 percent compared to last year.
The index’s monthly decline of 0.1 percent came in November with energy prices falling by 2.7 percent and food prices falling by 0.1 percent.
Excluding volatile food and energy prices, the core index rose 3.2 percent compared to last year. Compared to a 3.4 percent rise in October. In November, the index rose by only 0.1 percent.
Consumer spending rose 0.2 percent with strong spending on goods including recreational vehicles, clothing, shoes and furniture. Meanwhile, shoppers crowded into restaurants.
Excluding inflation, consumer spending rose 0.3 percent, a faster pace than 0.1 percent in October.
This spending was supported by higher disposable income, which rose by 0.4 percent, even when accounting for inflation. It rose from a 0.3 percent rise in October.
The personal saving rate, i.e. what remains following spending disposable personal income, rose to 4.1 percent.
Federal Reserve Chairman Jerome Powell hinted earlier this month that the central bank wants to focus on interest rate cuts, with officials forecasting at least three cuts next year.
In short, Axios points out, “An ideal combination for the Fed: inflation returning to pre-Covid-19 levels where the economy (for now) remains flat and consumer spending is healthy.”
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