Consumer Inflation In The US Jumps To 3.4% More Than Expected

(CTN News) – Despite the underlying pressures still seeming to be ebbing below the surface of consumer inflation in the United States, government data showed Thursday that the rate rose significantly above expectations in December. This is despite the fundamental pressures still appearing to be ebbing below the surface.

It was reported that the consumer price index (CPI), a key measure of inflation developed by the Department of Labor, was up by 3.4 percent from a year ago, and higher than the figure reported in November.

There was, however, a “core” metric in the last month of 2023 which strips out the volatility in food and energy prices, and its reading was only 3.9 percent.

There is no expectation that Federal Reserve officials will base their decision on a single month’s data when setting interest rates, but accelerating inflation is likely to put pressure on the central bank to raise interest rates.

After raising interest rates rapidly in the first half of 2022, policymakers have maintained a high level of interest rates ever since, in an effort to ease demand and lower inflation over the long term.

In order to ease demand, the government wants to make it more appealing to save rather than spend in order to reduce demand.

In spite of the rise in the CPI in December, there has been a substantial decrease in inflation since the peak of 9.1 percent in June 2022, while consumer spending has remained resilient as well.

In response to this, hopes have risen that the world’s biggest economy will have a “soft landing,” where inflation will cool without triggering a recession that may damage the economy.

In November and December, the Consumer Price Index rose 0.3 percent, which is also an increase over the previous month.

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