Annual inflation in the United States rises to 3.4 percent as food and housing prices rise

Shoppers in New York’s Union Square neighborhood, December 19, 2023. (Mansi Srivastava/The New York Times/File)

He Rising rents and food prices promoted General inflation in the United States in DecemberAn indication that the campaign federal Reserve Limiting inflation to its target 2% will keep happening Difficult,

thursday report work department showed that general prices increased 0.3% compared to November and a 3.4% Compared to 12 months ago. These increases were higher than the previous monthly increase of 0.1% in November and annual inflation of 3.1%.

However, if volatile food and energy costs are excluded, so-called core prices rose only a 0.3% Month-over-month, unchanged from November’s increase. core prices increased 3.9% Compared to last year, that’s one-tenth less than the 4% year-on-year increase recorded in November. Economists pay special attention to underlying prices because they are generally considered a better guide to the likely path of inflation by excluding costs that fluctuate from month to month.

general inflation is kept getting more or less cold Since reaching its highest level in four decades 9.1% In mid-2022. Yet, despite steady economic growth, low unemployment and healthy hiring, the persistence of still-elevated inflation helps explain why, the survey suggests. Many Americans are dissatisfied with the economyA possible major issue in the 2024 elections.

An independent barber waits for customers in his van on a street in New York, United States, on December 25, 2023. Reuters/Eduardo Muñoz/File

The Federal Reserve, which began aggressively raising interest rates in March 2022 to try to slow the pace of price increases, wants to reduce year-over-year inflation to its target level. 2%,

In general, progress against inflation has been significant. There was a year-on-year increase in the consumer price index from a year ago 6.5%well below four-decade high 9.1% Recorded in June 2022, but still very high. Additionally, wage growth has outpaced inflation in recent months, meaning Americans’ average take-home pay has increased after inflation.

There are good reasons to be optimistic that inflationary pressures will continue to ease in the coming months.

For example, the Federal Reserve Bank of New York reported this week that consumers now expect inflation only 3% For next year, the lowest one-year forecast since January 2021. This is important because consumers’ own expectations are considered a clear signal of future inflation: When Americans fear that prices will continue to rise, they generally They rush to buy things as quickly as possible. This wave of spending further fuels inflation,

But that unpleasant cycle does not seem to be happening.

A person walks past the Federal Reserve Bank of New York in New York, United States on March 13, 2023. Reuters/Brendan McDermid/File

And when Federal Reserve officials discussed the inflation outlook at their last meeting last month, they saw some promising signs: End supply chain delays which led to parts shortages and inflationary pressures, and a Reduction in rental costsWhich has started spreading in the economy.

Many economists have suggested curbing inflation 9% around 3% Achieving the goal of was easier than it could have been 2% Of the Federal Reserve.

A sign advertising job vacancies outside a Starbucks in Manhattan, New York, United States. May 26, 2021. Reuters/Andrew Kelly/File

The December US employment report released last week included some cautious news for the Federal Reserve: Average hourly wages increased. 4.1% Compared to last year, slightly up 4% Of November. And 676,000 people left the labor force, thereby reducing the proportion of adults who have a job or who are looking for a job at the same time. 62.5%This is the lowest level since February.

This is potentially worrisome because when fewer people are looking for work, employers often have difficulty filling jobs. As a result, they may be obliged to Increase salaries significantly to attract job seekers and then makes an impact Increasing labor costs for your customers through higher prices, This is a cycle that can maintain inflation,

(With information from AP)

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