Consumer Price Index Shows Inflation Easing for Sixth Consecutive Month
The Consumer Price Index (CPI) declined 0.1 percent in December on a seasonally adjusted basis, marking the sixth straight month of easing inflation.
Despite the easing trend, consumer prices remained elevated in December, rising 6.5 percent compared to December 2021.
The CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services. The decline in December was primarily driven by a drop in energy prices, which fell 4.5 percent. Food prices also moderated, rising 0.3 percent compared to a 0.5 percent increase in November.
The Federal Reserve has been aggressively raising interest rates in an effort to curb inflation. The central bank has raised rates seven times this year, with the most recent increase being a 50 basis point hike in December. The rate increases have slowed economic growth and helped to moderate inflation.
The latest CPI data provides further evidence that inflation is moving in the right direction. However, the Fed is likely to continue raising interest rates in the coming months until inflation falls to its target of 2 percent.
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