WASHINGTON (Reuters) – Prices rose moderately last December in the United States, keeping the annual increase in inflation below 3% for a third consecutive month, which could allow the Federal Reserve (Fed) to start reducing its rates.
Data released Friday by the Commerce Department showed that the PCE consumer price index increased in December by 0.2%, compared to a decline of 0.1% in November (unrevised). Over one year, it increased by 2.6%, which corresponds to the unrevised gain in November.
Economists polled by Reuters on average expected the PCE index to rise 0.2% over one month and up 2.6% year-on-year.
The basic “core PCE” inflation index, which excludes the volatile elements such as energy and food products, increased by 0.2% in December, compared to an increase of 0.1% in November.
Over one year, it amounted to 2.9%, the lowest increase since March 2021, compared to an increase of 3.2% recorded in November.
Slowing inflation boosts household purchasing power, which also contributes to the dynamism of consumer spending and the economy as a whole.
Consumer spending by American households increased by 0.7% in December, compared to an increase of 0.4% in November. On an adjusted basis, overall consumer spending rose 0.5% last month, following a similar rise in November.
(Report Lucia Mutikani; French version Lina Golovnya)
©2024 Thomson Reuters, all rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. “Reuters” and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.