The Consumer Price Index, a measurement of the average change over time in the prices paid by consumers for goods and services, fell 0.1% in December, in line with the Dow Jones estimate. That equated to the largest month-over-month decrease since April 2020.
But even with the decline for the month, headline CPI rose 6.5% from a year ago. However, that is the smallest annual increase since October 2021.
Economists and Fed officials are typically more focused on a so-called core inflation measure, or core CPI, which removes volatile food and energy prices to get a better sense of underlying price trends. That measure climbed 5.7% in December from a year earlier, compared with 6% previously. This also met expectations.
The takeaway from December’s CPI report is that inflation is moderating meaningfully. But the question remains: How quickly and how completely will prices return to normal after a long year and a half of rampant inflation?
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