Annual inflation in the United States rose to 3.4 percent, driven by rising food and housing prices

He Rising rents and food prices Promoted Average inflation in the United States in DecemberA sign of a campaign Federal Reserve To control inflation to its target 2% Will continue to happen difficult.

Thursday’s report Work Department indicating that the general price has increased 0.3% Compared to November and a 3.4% Compared to 12 months ago. The increase surpassed 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 one 0.3% Month-on-month, unchanged from November’s increase. The core price has increased by 3.9% Compared to the previous year, that’s less than a tenth of the 4% year-on-year increase recorded in November. Economists pay particular attention to underlying prices because, by excluding costs that typically fluctuate from month to month, they are considered a better guide to the likely path of inflation.

There is general inflation Cools more or less continuously After reaching the peak of four decades 9.1% By mid-2022. Still, the persistence of elevated inflation helps explain why, despite steady economic growth, low unemployment and healthy hiring, surveys show that Many Americans are dissatisfied with the economyA potential key issue in the 2024 elections.

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. A year ago, the consumer price index rose year-on-year 6.5%is below a four-decade high 9.1% Recorded in June 2022, but still painfully high. Additionally, wage increases have outpaced inflation in recent months, meaning Americans’ average take-home pay after inflation has increased.

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

The Federal Reserve Bank of New York reported this week, for example, that consumers now expect only inflation 3% For the next year, the lowest one-year forecast after January 2021. This is important because consumers’ own expectations are considered a signal of future inflation: when Americans fear that prices will continue to rise, they typically They rush to buy things sooner rather than later. This spending spree fueled further inflation.

But it doesn’t seem to be a vicious cycle.

And when Federal Reserve officials discussed the inflation outlook at their final meeting last month, they saw some hopeful signs: End supply chain delays which caused parts shortages and inflationary pressures, and a Reduced rental costswhich has begun to spread through the economy.

Many economists have suggested curbing inflation 9% around the 3% The goal of was easier said than done 2% of the Federal Reserve.

The December US employment report, released last week, contained some cautionary news for the Federal Reserve: an increase in average hourly wages 4.1% Compared to last year, slightly up 4% November. And 676,000 people Dropped out of the labor force, reducing the proportion of adults who have a job or are looking for a job at the same time. 62.5%The lowest level since February.

This is likely worrisome because when fewer people are looking for work, employers often have a harder time filling jobs. As a result, they may be forced Raise wages drastically to attract job seekers And then the effect Increase labor costs for your customers through higher prices. It’s a cycle that can Perpetuating inflation.

(with information from AP)