The Consumer Price Index for All Urban Consumers (CPI-U) decreased by 0.1% on a seasonally adjusted basis, reported the Bureau of Labor Statistics. Year-over-year, before seasonal adjustment the all items index grew by 6.5%.
The primary contributing variable to the deceleration in inflation was the drop in the price of gasoline. The price of foodstuffs at grocery stores increased, as did shelter costs, albeit at a slower pace.
Despite the fact that inflation in the United States appears to be slowing down, the Federal Reserve has indicated that more interest rate hikes will transpire into 2023 to curtail the soaring cost of living.
(Source: U.S. Bureau of Labor Statistics)
Food
In December, the index for food rose by 0.3%, after a 0.5% increase from the previous month. Over the last 12-month span, American consumers have paid 11.8% more for food items from grocery stores.
Grocery items that saw price increases in December included meats, poultry, fish, and eggs. Conversely, the prices for fresh fruits and vegetables and bakery products declined. Moreover, American consumers paid more to dine out in restaurants in December.
Gasoline Prices
In December, American consumers again paid less to gas up their vehicles. The price of gasoline dropped by 9.4% over the month, after the 2% decrease seen in November.
In December, prior to seasonal adjustment, the price of gasoline declined 12.5%.
Since this time last year, gasoline prices have decreased by 1.5%.
Energy
In December, the index for energy dropped 4.5%. This was primarily due to the decline in gasoline prices. However, American consumers paid 3% more for natural gas and 1% more for electricity over the month.
Year-over-year, the index for energy grew by 7.3%. Since this time last year, fuel oil prices surged by 41.5%. Likewise, American consumers paid 19.3% more for natural gas and 14.3% more for electricity over the last 12-month period.
(Source: U.S. Bureau of Labor Statistics)
All Items Less Food and Energy
In December, the all items less food and energy index edged up 0.3%. Unfortunately, American consumers continued to pay more shelter costs. The index for shelter rose 0.8% over the month.
Both the index for rent and the index for owners’ equivalent rent (which is correlated to the value of housing prices) increased by 0.8%, respectively.
“The shelter index was the dominant factor in the monthly increase in the index for all items less food and energy, while other components were a mix of increases and declines,” explained the Bureau of Labor Statistics in its monthly report.
Over the last 12-month period, the composite index for shelter increased by 7.5% – the most significant contributor to the overall percentage increase of the all items less food and energy index.
Other composite indexes that saw percentage increases since this time last year include furnishings and operations (+6.7%), new vehicles (+5.9%), recreation (+5.1%), and medical care (+4.0%).
Year-over-year, the all items less food and energy index increased by 5.7%.
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Source Cited: https://www.bls.gov/news.release/cpi.nr0.htm
Sarah has been writing on the topics of politics, history and finance for over a decade. She is currently an editor at CPI Inflation Calculator, covering the topics of CPI, inflation, US economy and economic commentary.
