Inflation in the US continued to slow in December, with the Federal Reserve poised to keep high interest rates this year. AP
Inflation in the US continued to slow in December, with the Federal Reserve poised to keep high interest rates this year. AP
Inflation in the US continued to slow in December, with the Federal Reserve poised to keep high interest rates this year. AP
Inflation in the US continued to slow in December, with the Federal Reserve poised to keep high interest rates this year. AP

US inflation falls again to ease pressure on households


Kyle Fitzgerald
  • English
  • Arabic

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.

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The biog

Name: Atheja Ali Busaibah

Date of birth: 15 November, 1951

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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

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Red Sparrow

Dir: Francis Lawrence

Starring: Jennifer Lawrence, Joel Egerton, Charlotte Rampling, Jeremy Irons

Three stars

The Africa Institute 101

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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

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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

Company%20profile
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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
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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
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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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Updated: January 13, 2023, 4:59 AM`