Prices in the United States continue to gradually move closer to a return to normal, after a new slowdown observed in November, according to data published Tuesday by the Department of Labor, even as the Federal Reserve (Fed) must start its monetary policy meeting.
At the end of November, inflation reached 3.1% over one year, slightly less than in October when it was at 3.2% according to the CPI index, to which Americans’ retirement pensions are indexed.
Core inflation, which excludes volatile food and energy prices, remained stable compared to October at 4.0% year-on-year, however the lowest in more than two years .
“This is the first time in a year that underlying inflation is not slowing. The bad news is that underlying inflation in services (which excludes rents, Editor’s note) is up 0.5% compared to the previous month. And housing remains desperately expensive,” said the chief economist of Oxford Economics, Michael Pearce, in a note.
Over one month, consumer prices rose slightly, by 0.1%, showing just above the expectations of analysts, who were instead counting on a further stabilization of prices, after that observed the previous month.
Fuel prices are the main drivers of the slowdown observed, with the cost at the pump continuing to fall over one year, but also over the month, good news for American consumers, who are particularly sensitive to variations in this product.
Food prices also see their prices continue to slow down sharply, with an increase of 2.9% over one year but only 1.7% for food consumed at home, the increase being more marked for takeaway or catering (+5.3%).
Among other sectors to see a drop in prices, used cars and health services are in decline, again positive news for American consumers.
The Fed remains cautious
Conversely, certain sectors, although slowing down, are experiencing price increases that are always higher than the index: this is particularly the case for housing, where the transmission of the surge in prices initially and then slowdown now, is felt with a delay.
Likewise, the transport sector remains faced with an increase of more than 10% over one year in its prices, thereby fueling inflation in the prices of services.
The CPI index confirms the trend observed by the other price index in the United States, the PCE, which is the one favored by the Federal Reserve (Fed), to determine its monetary policy and which ended the month of October up 3% over one year, again in constant slowdown.
The question of a return to normal inflation is a key point for US President Joe Biden, who began his campaign for re-election by highlighting his economic successes, while the country’s economic growth is the highest in the G7 and unemployment is at its lowest since post-pandemic.
But various opinion surveys underline that Americans do not credit the outgoing president with success on the economic level, mainly due to the impact of rising prices on household budgets, despite salaries which, after a time lag, tend to increase. catch up with inflation.
Faced with an increase in prices which had approached 10% in July 2022 (+9.5%), the Fed had decided to gradually raise its rates from March 2022, making access to credit more expensive for economic actors. , which theoretically slows down consumption and investment, and therefore the economy, to avoid a surge in prices.
The Fed begins its last monetary meeting on Tuesday, to determine whether it should raise its rates again, after two meetings which kept them at their current level, in a range between 5.25% and 5.50%.
The decision of the monetary policy committee will be known on Wednesday at 2 p.m., but already the vast majority of analysts are counting on rates being maintained, according to the CME FedWatch monitoring tool.