Prices on a wide range of products and services gave a respite. Although they rose slightly in November, the record indicates an evident moderation, a clear sign that inflation has cooled substantially compared to its peak in 2022 and predicts that this Wednesday, at the confluence of its December meeting, the Federal Reserve (Fed ) leave interest rates as they are, according to experts, in what will be the third consecutive pause.
The consumer price index rose 0.1%, as analysts predicted, and this is 3.1% compared to a year ago. These figures are very far from the increases that marked a forceful action by the Fed, which as of March 2022 has caused rates to stand at 5.25%-5.50% after eleven increases, the highest level. in 22 years. Inflation reached 9.1% in June of last year. Prices stood at 3.2% this October.
If the most volatile elements, such as food and energy, are excluded, the so-called core inflation increased by 0.3% in the last month and stands at 4% annualized. Both numbers are in line with forecasts and express that inflation really seems at least contained, although it still shows perseverance.
Although it has not yet fallen to the 2% that the Federal Reserve has set as its objective, this Tuesday there was no doubt that they will maintain the same price of money. Everything indicates that the fear of a recession is fading and that, despite the harsh conditions imposed, there will be what is called a soft landing. This is because, despite everything, consumption and the labor market remain strong despite slowing down.
However, these indicators do not prevent the Fed from remaining very attentive since underlying inflation continues to cause concern. Many investors expect the Fed to not only not hike, but to offer signs of when a rate cut could begin. Jerome Powell, president of the US central bank, is reluctant to specify and experts do not foresee this situation until at least half of 2024.
A 2.3% drop in energy prices is the main factor for more controlled inflation. Gasoline became cheaper by 6% and oil by 2.7%, at a time when the United States is producing more than recently precisely to avoid the rise of this determining value, which acts as a thermometer of economic health for many. citizens.
Food became more expensive by 0.2%, twice as expensive when eaten outside the home. In the annualized percentage, food rose 2.9% compared to a year ago, while energy has fallen 5.4%.
Residential spending, which represents a third of the price index, increased by 0.4% in November and this represents an increase of 6.5% in the twelve-month comparison. However, the annual average shows a significant drop from the peak reached in early 2023. The cost of transportation also increased.
