Jan. 12 (UPI) — Consumer prices declined at the end of 2022, indicating that policies from the Federal Reserve meant to cool consumer-level inflation may be working.
Data from the Commerce Department showed the price for all consumer goods declined by 0.1% from November levels.
Prices increased by 0.1% month-on-month from October to November. For all consumer goods, prices increased by 6.5% over the 12-month period ending in December, the smallest increase in that span since the period ending in October 2021.
Double-digit, year-on-year growth is still evident in the prices for food, energy and transportation, though it was the energy component of the Consumer Price Index that helped contribute to recent declines.
“The energy index decreased 4.5% over the month as the gasoline index declined,” the report from the Commerce Department read.
President Joe Biden is set to deliver remarks on the economy and his administration’s efforts to tackle inflation Thursday morning.
Biden said last week after the December jobs report showed the unemployment rate declined that the economy has seen two straight years of job growth and the situation is starting to stabilize following the strains imposed by the COVID-19 pandemic and the war in Ukraine.
“We still have work to do to bring down inflation, and help American families feeling the cost-of-living squeeze,” he said. “But we are moving in the right direction.”
Biden spent much of last summer rallying against the steady rise in consumer gasoline prices, arguably one of the more ubiquitous signs of consumer-level inflation. The price at the pump reached $5 per gallon last summer, but at $3.27 per gallon, retail gasoline prices remain more or less even with year-ago levels.
Crude oil prices account for the bulk of what consumers see at the pump and those prices are on the rise, suggesting inflationary strains are not yet over. That was echoed last week in the latest minutes from the Federal Open Market Committee, where Federal Reserve officials said they’ve made “significant progress” in the fight against inflation, but it would be a “misperception” to think that policymakers would ease back on the rate hikes from last year.
Nevertheless, the White House said the latest reading on inflation showed that a transition to stable growth and a so-called soft landing, the possibility of only a very minor recession, was in the cards for the world’s leading economy.
That, however, comes against warnings from the International Monetary Fund and the World Bank that much of the global economy will enter some form of recession this year. The U.S. economy will likely be spared, though the economies of Europe will continue to face headwinds for much of the year with zero growth expected for 2023.