US inflation continues to rise in November-Report
2022.12.13 08:49
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US inflation continues to rise in November-Report
Budrigannews.com – The smallest annual increase in inflation in nearly a year occurred in November as the cost of gasoline and used cars fell, resulting in consumer prices in the United States barely rising. This could give the Federal Reserve permission to begin reducing the size of its interest rate increases on Wednesday.
The Labor Department reported on Tuesday that the consumer price index increased by 0.1 percent in November after rising by 0.4 percent in October. Reuters polled economists and predicted a 0.3% increase in the CPI.
The Consumer Price Index (CPI) increased 7.1% between November and present. After a rise of 7.7% in October, that was the smallest rise since December 2021. In June, the annual CPI reached its highest level since November 1981, when it reached 9.1%.
As the significant increases of the previous year are eliminated from the calculation, annual inflation is sluggish. Demand is also being dampened as a result of the Fed’s aggressive monetary policy.
The report was distributed as authorities at the U.S. national bank accumulated for their last two-day strategy meeting of the year. It is anticipated that the Federal Reserve will raise interest rates by 50 basis points on Wednesday, snapping a run of four consecutive 75-basis-point increases as it enters the fastest rate-hiking cycle since the 1980s.
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Last month, Fed Chair Jerome Powell said that the central bank could slow down the rate at which it raises interest rates “as soon as December.”
Barring the unstable food and energy parts, the CPI expanded 0.2% last month subsequent to rising 0.3% in October. The so-called core CPI increased 6.0% through November, following an increase of 6.3% in October.
Sticky rents are keeping overall core inflation elevated despite falling core goods prices caused by falling prices for used cars and businesses offering discounts to entice cash-strapped holiday shoppers and clear inventory amid slowing demand and improved supply chains.
Services are also under pressure, as higher wages indicate a tight labor market.
Although independent rent measures indicate that rental inflation is decreasing, that trend is not expected to be reflected in CPI data until at least the following year. Economists anticipate that the Fed will continue to tighten monetary policy even as it slows the pace of rate increases on Wednesday due to the still-high core inflation readings.
Financial experts anticipate that the Fed should lift its strategy rate to a level higher than the as of late projected 4.6%, where it could remain for quite a while. On Wednesday, they anticipate that the central bank will raise its estimate for the so-called terminal rate.
This year, the Fed increased the policy rate by 375 basis points from close to zero to a range of 3.75 percent to 4.0%.
