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Inflation: The rate of inflation in the USA is falling noticeably


Price increases in the US economy have slowed. And this is not only due to the strongly fluctuating energy prices.

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Supermarket customers in a US store

Photo: Orit Ben-Ezzer / ZUMA Wire / dpa

Inflation in the United States fell significantly before the turn of the year.

The inflation rate for goods and services fell to 6.5 percent in December from 7.1 percent in November.

This is reported by the Department of Labor in Washington.

Experts interviewed by the Reuters news agency had expected a rate of this magnitude.

Nevertheless, it is a noticeable sign of economic relief: it is already the sixth decline in a row and fuels hopes that the wave of inflation is abating.

The inflation rate is still well above the Fed's target of 2.0 percent.

This increased the base rate in December by half a percentage point to the new range of 4.25 to 4.50 percent.

The monetary authorities meanwhile see considerable progress in curbing inflation and want to steer a less aggressive course.

more on the subject

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  • "Inflation is slowing down": Fewer firms want to raise prices

"Inflation rates will continue to fall over the coming months," comments Thomas Gitzel, Chief Economist at VP Bank.

"It will initially go relatively quickly to around 4 percent," is his assessment, mainly because he expects a lower increase in rental prices in the USA.

Bastian Hepperle from Hauck Aufhäuser Lampe estimates: »In June, the two before the decimal point could appear again for the first time in more than two years.

The direction is right, but inflationary pressures are still too high to calm the Fed.

The Fed will continue to tighten interest rates, but must be careful not to overdo it.”

In addition, many observers consider it positive that the so-called core rate has also fallen, i.e. inflation without the volatile energy and food prices.

It fell from 6.0 to 5.7 percent.

Robust labor market

In addition, the number of initial jobless claims in the USA remains low.

This means that the situation on the labor market is still relaxed.

In the past week, initial applications fell slightly by 1,000 to 205,000, according to the Department of Labor.

This is the lowest value since last September.

Analysts had expected an average of 215,000 applications.

The weekly initial claims are considered a timely indicator for the American job market.


Source: spiegel

All business articles on 2023-01-12

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