This time the forecasts were correct, although they even fell short. There was a consensus that inflation in the United States had cooled in November, despite continuing to be well above what is advisable. And this was confirmed by the official data. Prices eased significantly, falling to 7.1% annualized from 7.7% in October.
This is a clear number that the increase in the cost of consumption, a great political workhorse and Achilles heel of the Biden government, is in a clear trend of losing steam. Analysts expected this decline, but not that much. They left it at 7.3%. The Bureau of Statistics report is the latest sign that the runaway inflation that has been plaguing the US economy is beginning to ease, after months of all-out fighting from the Federal Reserve (Fed).
Precisely this result was announced this Tuesday, just the day the US central bank begins its two-day meeting. All the bets, thanks in part to the declarations of its president, Jerome Powell, indicate that the increase in interest rates will continue, although not in such a forceful way as in the last four meetings, which each ended with a 0.75% rise in the price of money.
Since inflation climbed above 9%, the Fed has raised rates to 3.75%. Now everyone points out that the Reserve will adopt a rise of 0.5%, as planned, without considering that this inflation result, better than predicted, will make them change their minds and not go up as much.
The data was welcomed on Wall Street. The Dow Jones index climbed more than 800 points in the pre-market. And it is that the prices from one month to the next remained at 0.1% when it was expected that it would be 0.3%. The increase compared to last year, although above the 2% that the Fed sets for healthy inflation, was matched with the lowest level since November 2021.
Excluding more volatile items like food and energy prices, the so-called core consumer price index rose 0.2% month-on-month and 6% over the twelve-month index, compared to the estimates respectively of 0.3% and 6.1%.
Falling energy prices have kept inflation at bay or down. The price fell 1.6% in one month, largely due to the 2% lower price of gasoline and the gallon is already far from the five dollars it cost. Despite this setback, the price of energy is 13.1% more expensive than in November 2021. In addition, the cost of food grew by 0.5% and is already at a 10.6% rise in relation to a year ago.
And the cost of housing, which represents a third of the balance of the price index, continues to climb, with growth of 0.6% between months and 7.1% annualized.
Despite this, inflation has been slowing on an annualized basis after peaking last June, evidence that prices have peaked after months of much stronger than expected increases. Many economists thought that this problem would disappear in 2022, but it has not. Today they make that forecast for 2023, where they expect the Fed to reach the 5% ceiling on interest rates.
