COLORADO SPRINGS — New consumer price data released today, shows a slight drop in inflation. In December, the consumer price index fell 0.1%, which is the largest monthly drop since April 2020.
The CPI measures the cost of a broad range of consumer goods and services. This marks the sixth straight month that we've seen the year-over-year inflation rate drop. But while prices remain high, we likely won't see significant changes in the prices of goods just yet.
“It doesn't really mean we're necessarily going to see prices go down for any goods. We'll just see the rise being smaller than it was in previous years,” said Joe Craig, the interim director for the UCCS economic forum. “The Fed is committed to bringing inflation down, and it’s coming down. It's not coming down drastically, but it is moving the trajectory that they want.”
He says the numbers released today were as expected because of what the federal reserve is doing by increasing interest rates to moderate inflation. He also mentioned consumers will likely feel the impact of the fed’s actions next year.
“My guess is in a year or two, right? Which is probably not the answer most people want to hear,” said Craig.
The CPI report shows that the inflation rate rose 6.5% year-over-year, in December. That’s a drop from November, when it was at 7.1%. The big categories keeping inflation high are energy and food prices. Electricity is up over 14% from December 2021, natural gas is up over 19%, and dairy prices up over 15%.
“We’ve been looking for inflation to start coming down. The president has understood that high prices are tough on families, and so this has been a priority of his,” said Heather Boushey, an economic advisor for president Joe Biden.
Boushey told News5 the latest report are steps in the right direction, and she also credits actions taken by the Biden Administration.
“Doing the things that the president is focused on to, to affect energy prices has been a really important piece of the puzzle. Energy prices have been a significant portion of these price increases over time. Getting those down, has been core to seeing prices fall over time,” said Boushey.
This is the last inflation report before the federal reserve meets this month. The panel is set to decide whether to increase interest rates again to further reduce inflation.
Inflation last June was more than 9%, the highest in 40 years.
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