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 expected on average a rise in the PCE index of 0.2% over one month and an increase of 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)
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