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

he Rising rents and food prices promoted to General inflation in the United States in Decembera sign that the campaign Federal Reserve To reduce inflation to its target 2% It will continue to be difficult.

Report on Thursday Work section It showed that general prices increased by 0.3% Compared to November and 3.4% Compared to 12 months ago. These increases exceeded the previous monthly increase of 0.1% and annual inflation of 3.1% in November.

However, if we exclude volatile food and energy costs, so-called core prices only rose by one factor 0.3% On a monthly basis, unchanged from the increase in November. Core prices increased by 3.9% Compared to the previous year, one-tenth less than the 4% annual increase recorded in November. Economists pay special attention to core prices because, by excluding costs that typically fluctuate from month to month, they are a better guide to the likely path of inflation.

Its general inflation It cools down more or less constantly Since it reached its highest level in four decades 9.1% In mid-2022. However, the persistence of still-high inflation helps explain why surveys show, despite steady economic growth, low unemployment and good employment. Many Americans are unhappy with the economyIt is a potential major issue in the 2024 elections.

The Fed, which began raising interest rates aggressively in March 2022 to try to slow the pace of price increases, wants to lower inflation on an annual basis to its target level. 2%.

Overall, progress in combating inflation has been significant. A year ago, the year-on-year increase in the CPI was 6.5%well below the highest level in four decades 9.1% It was recorded in June 2022, but is still painfully high. Additionally, wage increases have outpaced the rate of inflation in recent months, meaning the average wage Americans receive will rise after inflation.

There are strong 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 an inflation rate of just 0.2%. 3% for next year, the lowest one-year forecast since January 2021. This is important because consumers' own expectations are a clear sign of future inflation: When Americans fear continued price acceleration, they usually They are rushing to buy things sooner rather than later. This spending spree tends to fuel more inflation.

But this unpleasant cycle does not seem to occur.

When Fed officials discussed inflation expectations at their final meeting last month, they saw some hopeful signs: End of supply chain and delays Which caused shortages of spare parts and inflationary pressures, and a Reduction in rental costswhich began to spread in the economy.

Many economists have suggested that reducing inflation 9% About the 3% It was easier to achieve than to achieve the goal 2% From the Federal Reserve.

The US December employment report, released last week, contains some dovish news for the Fed: average hourly earnings rose 100% 4.1% Compared to the previous year, slightly higher than 4% November. And 676,000 people leaving the labor force, reducing the proportion of adults who either have or are looking for a job. 62.5%This is the lowest level since February.

This can be concerning because when fewer people are looking for work, employers often have difficulty filling jobs. As a result, they may have to Significantly increase wages to attract job seekers And then influence Increase labor costs for your customers through higher prices. It's a course that can Inflation continues.

(With information from AP)