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Financial News: U.S. Core Consumer Price Growth Slows More Than

U.S. Core Consumer Price Growth Slows More Than Expected In December

01/26/2024 - 09:40:00 (RTTNews)

(RTTNews) - Annual U.S. consumer price growth came in unchanged in the month of December, according to a report released by the Commerce Department on Friday, although the report also showed a bigger than expected slowdown in the annual rate of core consumer price growth.

The Commerce Department said consumer prices in December were up by 2.6 percent compared to the same month a year ago, unchanged from November and in line with economist estimates.

Meanwhile, the report said the annual rate of growth by core consumer prices, which exclude food and energy prices, slowed to 2.9 percent in December from 3.2 percent in November. Economists had expected core price growth to decelerate to 3.0 percent.

Consumer prices rose by 0.2 percent on a monthly basis in December after edging down by 0.1 percent in the previous month.

Core consumer prices also saw a 0.2 percent monthly increase in December following a 0.1 percent uptick in November.

The modest monthly increases by consumer prices and core consumer prices both came in line with economist estimates.

"Today's inflation report gives the Fed a path to cut interest rates," said Larry Tentarelli, Chief Technical Strategist, Blue Chip Daily Trend Report. "Based on strong recent GDP data and jobs data, we expect the first rate cut to be in the May-June period."

He added, "If jobs and or economic data softens a bit and inflation continues to drop quickly, that could increase the chances of a rate cut in March, but that is not our base case yet."

The inflation readings, which are said to be preferred by the Federal Reserve, were included in the Commerce Department's monthly report on personal income and spending.

The report said personal income rose by 0.3 percent in December after climbing by 0.4 percent in November. The increase in income came in line with economist estimates.

Disposable personal income, or personal income less personal current taxes, also increased by 0.3 percent in December after rising by 0.4 percent in November.

The Commerce Department also said personal spending advanced by 0.7 percent in December following an upwardly revised 0.4 percent increase in November.

Economists had expected spending to rise by 0.4 percent compared to the 0.2 percent uptick originally reported for the previous month.

Excluding price changes, personal spending climbed by 0.5 percent in December, matching an upwardly revised increase in November.

With spending increasing by much more than income, personal saving as a percentage of disposable personal income tumbled to 3.7 percent in December from 4.1 percent in November.

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