January 31, 2023

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New US Inflation Figures: Price growth ended at 5.5% in November

Just under a week after the central bank, the Federal Reserve, raised its key interest rate for the seventh time in a row, new inflation numbers arrived from the United States on Christmas Eve.

PCE, or “personal consumption expenditures,” is the Fed’s preferred measure of price growth.

In advance, according to Bloomberg estimates, the annual inflation rate was expected to be 5.5 percent, down from Six percent empty in October.

Unlike the Consumer Price Index (CPI), the weighting of goods and services in personal consumption expenditures is adjusted to take into account changes in people’s consumption habits. The PCE deflator is the amount that the US central bank uses as a basis in its calculations of inflation trends.

The core personal consumption expenditures index closed at 4.7 percent in November, while it was previously expected at 4.6 percent.

Meanwhile, new figures on Friday show that private income in the US rose 0.4 percent month-on-month in November. It was somewhat higher than the estimate, which was 0.3 percent. On the other hand, private consumption was somewhat lower than expected, rising 0.1 percent on a monthly basis.

stunted growth

According to the US Consumer Price Index, November numbers were published just over a week ago, it was Price growth in the US was measured at 7.1 percent last month.

Core inflation, which excludes US food and energy prices, closed at a steady 6 per cent last month, down from the annual rate of 6.3 per cent in October.

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Sharply rising prices have hit households, businesses, and financial markets over the past several months. In the United States, food prices have skyrocketed, as have electricity, gasoline, diesel, and transportation prices.

The US central bank has reached into its toolbox and pulled out the interest rate weapon. With a series of three rate hikes, the Fed has stagnated inflation, although it remains well above the 2% target.

He indicated several increases in interest rates

When the Fed made its last rate announcement for the year just under a week ago, an increase of 0.5 percentage point was expected, Something also came true.

The key US interest rate is now in the range of 4.25 to 4.5 percent, the highest level since December 2007, just before the financial crisis. The double rate hike followed four increases of 0.75 percentage points in a row.

The Fed’s “dot chart” further revealed that interest rate committee members expect interest rates to peak at 5.1 percent at the end of next year, an estimate that has been raised somewhat from 4.6 percent in September. Members also do not expect any rate cuts until 2024.

The inflation figures we have received so far for October and November show a welcome decrease in the monthly growth rate of price inflation. Central Bank Governor Powell said at the press conference afterwards that substantially more evidence is needed to confirm that inflation is on the way down.(Terms)Copyright Dagens Næringsliv AS and/or our suppliers. We’d like you to share our statuses using links that lead directly to our pages. Reproduction or other use of all or part of the Content may be made only with written permission or as permitted by law. For additional terms look here.

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