US annual inflation rises 6.5%, slowest pace recorded in a year

Washington:

Consumer inflation in the United States slipped to the lowest level in a year in December, government data showed on Thursday, a sign the worst of the red-hot price rise may be over.

As American households grappled with decades-high inflation over the past year, the Federal Reserve raised its benchmark lending rate at a pace unheard of since the 1980s in hopes of cooling the world’s largest economy.

On the back of the aggressive campaign, the Consumer Price Index (CPI) last month rose 6.5 percent from a year earlier, the smallest increase since October 2021, the Labor Department said.

The annual figure is also down from November’s 7.1 percent spike.

“The index for gasoline was by far the largest contributor to the monthly all-goods decrease,” the Labor Department said in a statement.

The department said this more than offset increases in the shelter component, with higher rents still increasing consumer costs.

Between November and December, the CPI declined by 0.1 per cent, the first time in nearly two years that it registered a month-on-month contraction, the data showed.

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