Gwynn Guilford and Nick Timiraos of The Wall Street Journal report that the pace of price increases accelerated in December. They write:
Prices ticked up in December, a reminder of the pressures still facing consumers after a year when inflation fell by nearly half and paychecks grew, delivering real wage gains in 2023 for the first time in three years.
Inflation’s cool down from historic highs keeps the Federal Reserve on track to hold rates steady later this month and contemplate cutting them later this year. But Americans aren’t in the clear yet. The consumer-price index increased 3.4% from a year earlier in December, the Labor Department said Thursday. The acceleration from November’s 3.1% advance shows inflation isn’t fully beaten. […]
While a promising sign for the economy, this resilience could stall the pace of improvement in inflation, said Pooja Sriram, U.S. economist at Barclays. “Activity is slowing, but it’s not slow. Labor-market conditions are moderating, but they’re still fairly tight,” she said. “So we’re a little circumspect about whether this disinflation can proceed as rapidly as what we’ve seen.”
Read more here.
