US Inflation’s Looking Dishy

US Inflation’s Looking Dishy

about 1 year ago2 mins

Data out on Tuesday showed that US consumer price rises were pretty teeny last month.

What does this mean?

Economists were careful not to get their hopes up when October's surprisingly mild inflation data broke, but with November's numbers coming in low too, this is starting to look like a trend. Check it out: prices for energy and used cars – major culprits in this year's inflation boom – fell by a tidy 1.6% and 2.9% last month from the one before. Add in sliding medical and transport costs, and you get an overall cooldown in price rises that offset the upticks in food and shelter. And getting down to brass tacks, even "core inflation” – which excludes the volatile stuff like food and energy – came in below expectations. So at the end of the day, prices were up just 0.1% from October and 7.1% versus the year before – the lowest annual reading we've seen in a year.

US inflation

Why should I care?

The bigger picture: Take a hike, hikes.

Inflation’s still miles above the 2% target set by the Federal Reserve (the Fed), but this report will have come as a minor Christmas miracle for the central bank all the same. Folk already expected the Fed to drop this week’s rate hike to 0.5 percentage points, and this data gives it all the more reason to ease up: in fact, some economists think the Fed might even consider pausing hikes by early next year if this trend continues.

Federal Reserve interest rates

Zooming out: It’s the thought that counts.

The prospect of prices settling down might suggest that this year’s festivities have been saved – but inflation could still be the Grinch that stole Christmas. A survey out this week showed that 60% of shoppers are planning to buy fewer gifts this year, and the vast majority will be putting their Christmas presents on the tab: 60% are using credit cards to fund their generosity, with another 22% relying on buy-now-pay-later services.

Finimize

BECOME A SMARTER INVESTOR

All the daily investing news and insights you need in one subscription.

Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

/3 Your free quarterly content is about to expire. Uncover the biggest trends and opportunities. Subscribe now for 50%. Cancel anytime.

Finimize
© Finimize Ltd. 2023. 10328011. 280 Bishopsgate, London, EC2M 4AG