Inflation gauge closely watched by the Fed cooled in December, but prices remain high

SlateStone Wealth chief market strategist Kenny Polcari and former Dallas Fed adviser Danielle DiMartino Booth discuss if inflation is stabilizing faster than anticipated on 'Cavuto: Coast to Coast.'showed signs of slowing in December, but it still remained abnormally high, according to new data released Friday.

The Personal Consumption Expenditures index showed that consumer prices rose 0.1% from the previous month and rose 5% on an annual basis, according to the Bureau of Labor Statistics. Core prices, which strip out the more volatile measurements of food and energy, climbed 0.3% from the previous month and 4.4% year-over-year. Those figures are both in line with forecasts by Refinitiv economists.

While the Fed is targeting the PCE headline figure as it tries to wrestle consumer prices back to 2%,previously told reporters that core data is actually a better indicator of inflation. Both the core and headline numbers point to inflation that is running well above the Fed's preferred 2% target, a troubling sign as the central bank is already hiking interest rates at the fastest pace in decades.

"We've continually expected to make faster progress on inflation than we have," Powell told reporters last month. "That's why the peak rate for this year goes up between this meeting and the September meeting. You see the fact that we've made less progress than expected on inflation."

I wonder where the hell they get this data. Very time I go to the grocery store I pay more, NOT LESS. Eggs, Milk, Meats, fresh fruits & veggies. I have not seen one thing cool down at the store. You know the stuff you need to live on.

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US inflation and consumer spending cooled in DecemberAn inflation gauge closed watched by the Federal Reserve eased further in December, and consumer spending fell — evidence the Fed’s interest rate hikes are slowing the economy. Prices rose 5% from a year earlier, down from the 5.5% increase in November. 'the Fed'? 'the economy'? 'the 5.5% increase'? You really ought to get an editor who know the AP style book. 'THE Fed!?' This type of language is giving me ptsd. Of course consumer spending fell. Choosing between food, gas or utilities tends to do that. Especially when wages aren’t matching inflation.
Source: AP - 🏆 728. / 51 Read more »