US consumer prices rose by 6.5% in the 12 months to December, the Labor Department said Thursday, announcing the slowest inflationary growth in more than a year and indicating smaller rate hikes by the Federal Reserve which raised rate hikes aggressively earlier to curb price pressures
WASHINGTON (Pakistan Point News / Sputnik - 12th January, 2023) US consumer prices rose by 6.5% in the 12 months to December, the Labor Department said Thursday, announcing the slowest inflationary growth in more than a year and indicating smaller rate hikes by the Federal Reserve which raised rate hikes aggressively earlier to curb price pressures.
The Consumer Price Index for All Urban Consumers, known in short as the CPI, slowed exactly as forecast by economists, after a 7.1% annual growth reported for November.
"This was the smallest 12-month increase since the period ending October 2021," the Labor Department said in a news release.
The CPI hit a 40-year high in June when it grew at an annual rate of 9.1%, versus the Fed's inflation target of just 2% per annum. In a bid to control surging prices, the central bank added 425 basis points to interest rates since March via seven rate hikes. Prior to that, interest rates peaked at just 25 basis points, as the central bank slashed them to nearly zero after the global COVID-19 outbreak in 2020.
The Fed, which executed four back-to-back jumbo rate hikes of 75 basis points from June through November, imposed a more modest 50-basis point increase in December. For its next rate decision in February, economists expect the central bank to announce an even smaller hike of 25 basis points.
