Inflation in the US slowed again in December, easing pressure on households and businesses as the Federal Reserve is set to continue raising borrowing costs this year.
The consumer price index, or CPI, increased 6.5 per cent year-on-year last month, down from 7.1 per cent the month prior, the US Bureau of Labour Statistics said on Thursday.
It was the smallest 12-month gain since October 2021.
On a monthly basis, the CPI decreased by 0.1 per cent in December.
“Even though inflation is high … it is coming down in America month after month,” President Joe Biden said in remarks from the White House.
The core CPI, which excludes the volatile food and energy markets, was up by 5.7 per cent over the past 12 months.
The moderation in prices was largely driven by declining fuel costs, with the energy index decreasing by 4.5 per cent. Average petrol costs in the US have fallen to $3.27 a gallon since hitting $5 in June, according to AAA.
Costs for used cards and airline fares also decreased last month.
Thursday's report shows that inflation is slowing after peaking at 9.1 per cent last summer, giving room for the Fed to reduce its interest rate increases in a bid to rein in the high cost of goods.
CME's FedWatch tool expects the central bank to raise interest rates by 25 basis points when it next meets, after a year in which it raised the federal funds rate to the range of 4.25 to 4.50 per cent.
The minutes released from the central bank's meeting in December showed officials were not willing to reduce the federal funds rate this year in a quest to bring inflation back down to its long-term goal of 2 per cent.
At the same time, the Fed has said it would be flexible in possibly scaling back the scale of interest rate increases.
Fed chairman Jerome Powell said the central bank expected the federal funds rate to reach 5.1 per cent by the end of the year.
Meanwhile, a separate Labour Department report showed applications for unemployment benefits fell to their lowest level in 15 weeks, a sign of a resilient labour market despite the Fed's interest rates.
Jobless aid applications fell from 206,000 to 205,000 this week.
Mr Powell has repeatedly indicated that the labour market remains too tight, a contributing factor to inflation.
A report last week showed that employers added 223,000 jobs last month as the unemployment rate dipped to 3.5 per cent, a 53-year low.
Policymakers forecast unemployment in the US will jump to 4.6 per cent this year, according to a summary of their economic projections.
Mr Powell previously said the economy must continue to show signs that it is slowing if inflation is to climb back down to the Fed's 2 per cent objective.
Thursday's report is the last the Fed will receive before it issues its next interest rate decision at the end of the month.
Killing of Qassem Suleimani
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The biog
Name: Atheja Ali Busaibah
Date of birth: 15 November, 1951
Favourite books: Ihsan Abdel Quddous books, such as “The Sun will Never Set”
Hobbies: Reading and writing poetry
COMPANY PROFILE
Name: N2 Technology
Founded: 2018
Based: Dubai, UAE
Sector: Startups
Size: 14
Funding: $1.7m from HNIs
MATCH INFO
Barcelona v Real Madrid, 11pm UAE
Match is on BeIN Sports
Red Sparrow
Dir: Francis Lawrence
Starring: Jennifer Lawrence, Joel Egerton, Charlotte Rampling, Jeremy Irons
Three stars
The Africa Institute 101
Housed on the same site as the original Africa Hall, which first hosted an Arab-African Symposium in 1976, the newly renovated building will be home to a think tank and postgraduate studies hub (it will offer master’s and PhD programmes). The centre will focus on both the historical and contemporary links between Africa and the Gulf, and will serve as a meeting place for conferences, symposia, lectures, film screenings, plays, musical performances and more. In fact, today it is hosting a symposium – 5-plus-1: Rethinking Abstraction that will look at the six decades of Frank Bowling’s career, as well as those of his contemporaries that invested social, cultural and personal meaning into abstraction.
Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
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COMPANY%20PROFILE%20
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UAE currency: the story behind the money in your pockets
The specs
Price, base / as tested Dh1,470,000 (est)
Engine 6.9-litre twin-turbo W12
Gearbox eight-speed automatic
Power 626bhp @ 6,000rpm
Torque: 900Nm @ 1,350rpm
Fuel economy, combined 14.0L / 100km
Why seagrass matters
- Carbon sink: Seagrass sequesters carbon up to 35X faster than tropical rainforests
- Marine nursery: Crucial habitat for juvenile fish, crustations, and invertebrates
- Biodiversity: Support species like sea turtles, dugongs, and seabirds
- Coastal protection: Reduce erosion and improve water quality
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Five expert hiking tips
- Always check the weather forecast before setting off
- Make sure you have plenty of water
- Set off early to avoid sudden weather changes in the afternoon
- Wear appropriate clothing and footwear
- Take your litter home with you
Six large-scale objects on show
- Concrete wall and windows from the now demolished Robin Hood Gardens housing estate in Poplar
- The 17th Century Agra Colonnade, from the bathhouse of the fort of Agra in India
- A stagecloth for The Ballet Russes that is 10m high – the largest Picasso in the world
- Frank Lloyd Wright’s 1930s Kaufmann Office
- A full-scale Frankfurt Kitchen designed by Margarete Schütte-Lihotzky, which transformed kitchen design in the 20th century
- Torrijos Palace dome
UAE currency: the story behind the money in your pockets
SPECS
Engine: 4-litre V8 twin-turbo
Power: 630hp
Torque: 850Nm
Transmission: 8-speed Tiptronic automatic
Price: From Dh599,000
On sale: Now
The specs
Engine: 3.9-litre twin-turbo V8
Power: 620hp from 5,750-7,500rpm
Torque: 760Nm from 3,000-5,750rpm
Transmission: Eight-speed dual-clutch auto
On sale: Now
Price: From Dh1.05 million ($286,000)
Farasan Boat: 128km Away from Anchorage
Director: Mowaffaq Alobaid
Stars: Abdulaziz Almadhi, Mohammed Al Akkasi, Ali Al Suhaibani
Rating: 4/5
Specs
Engine: Dual-motor all-wheel-drive electric
Range: Up to 610km
Power: 905hp
Torque: 985Nm
Price: From Dh439,000
Available: Now
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