Inflation Cooled A Bit In December But Prices Remain High

The latest economic data released by the Department of Labor shows that inflation is continuing to cool. The consumer price index fell by 0.1% from November to December, marking the largest month-over-month decrease since April 2020. However, inflation was still up by 6.5% on an annual basis as the cost of goods continued to be elevated.

The core consumer price index, which filters out food and energy prices, rose by 0.3% month-to-month and 5.7% year-over-year.

Those numbers were all within Wall Street estimates.

The main driver of lower inflation was the declining cost of gas, which fell by 9.4% for the month and is 1.5% lower than last year.

While economists are pleased with the latest data, they believe the Federal Reserve will continue to hike interest rates in the coming year,

"Today's CPI reading is another sign that inflation is heading in the right direction and indicates the peak is likely in the rearview," said Mike Loewengart, the head of model portfolio construction at Morgan Stanley Global Investment Office, according to Fox Business. "But we aren't out of the woods yet, as it is still well above the Fed's target rate, and the Fed has remained adamant that they will keep rates high to bring inflation back to normal levels."