The inflation rate in the United States abandoned its downward streak in December and prices rose three tenths year-on-year, an increase that places the indicator at the end of 2023 at 3.4%, the United States Bureau of Labor Statistics reported this Thursday.
In monthly terms, consumer prices increased three tenths compared to November, while core inflation, a key data that the Federal Reserve analyzes for its interest rate decisions, fell one tenth year-on-year, to 3.9%.
Prices had been falling in year-on-year terms since October, at a time when the Fed is closely observing the effects on this indicator of the eleven interest rate increases it has carried out since March 2022 to control prices.
The data is therefore a setback for the Fed’s objectives of returning inflation to 2%. To achieve this, the US regulator has carried out eleven rate increases since March 2022 to the current range of 5.25% to 5.5%, its highest level since 2001.
The house price index continued to rise in December and contributed more than half to the monthly increase in prices of all items. It rose five tenths compared to November and accumulated a year-on-year increase of 6.2%.
The energy index rose 0.4% during the month, with increases in the price of electricity and gasoline, although it accumulated a year-on-year drop of 2%. The food index, for its part, increased 0.2% in December and, compared to a year before, it rose 2.7%.
Core inflation, the index of all items except food and energy, the most volatile, increased 3 tenths in December. However, this indicator fell one tenth compared to December 2022 and in year-on-year terms it has been falling since March.
USA: FED will make a decision after knowing inflation of 3.4%
This data is one of the most relevant for the Federal Reserve. In their last meeting of the year held on December 13 and 14, the members of the Federal Open Market Committee (FOMC) of the US regulator, the body in charge of deciding whether or not to raise rates, chose to maintain them.
Even so, the president of the US central bank, Jerome Powell, warned that although this may be “the maximum rate of this cycle” or it may be “close”, economic data will still continue to be closely analyzed to decide on monetary policy. in each meeting and that new increases are not completely ruled out.
The US labor market is another of the data analyzed by the Fed and, far from cooling, it continues to remain solid.
In December, the net creation of new jobs rose again in the last month of the year and 216,000 positions were created, 43,000 more than those generated a month before and the unemployment rate remained at 3.7%, a figure which does not seem to indicate that the labor market has suffered from the rate increases.
The Fed will hold its next meeting on January 30 and 31, when it will announce whether it will maintain or raise rates again. Decreases are not expected at the moment, as the regulator has clearly stated.
Source: Larepublica
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