Inflation slowed more than expected in November in the United States, which is good news for consumers. This should comfort the US central bank, which begins a meeting on Tuesday, to raise its rates less than in recent months.
Inflation stood at 7.1% over one year, against 7.7% in October, according to the CPI index, which refers to and on which pensions are indexed, published Tuesday by the Labor Department.
This is the lowest increase in consumer prices since December 2021.
And in just one month, prices rose just 0.1%, compared to 0.4% in October.
Analysts were expecting 7.3% year on year, and 0.2% month on month, according to MarketWatch consensus.
Housing prices were “by far the main contributor to the monthly increase”, and were stronger than the drop in energy prices, details the Department of Labor in its press release.
“Prices are moving in the right direction, but remain very high on an annual basis,” observes Rubeela Farooqi, economist for HFE, in a note.
The peak of inflation was reached in June, with a price increase of 9.1% compared to June 2021. It was then the largest increase since 1981. And since then, the decline has been slow.
“I think we will see a significant reduction in inflation in the coming year,” said Treasury Secretary Janet Yellen on Sunday on CBS, in giving precise figures.
More optimistic consumers
The publication of these figures coincides with the start of a meeting of the American central bank, the Fed, whose current priority is, precisely, to bring inflation back to around 2% per year.
To do this, it has been gradually raising its key rate since March. The interest rates on loans contracted by households and businesses are then higher, pushing them to consume less, which helps ease the pressure on prices.
This slowdown in inflation should convince the Fed to raise rates more slowly this time than in recent months. An increase of half a percentage point is now expected, after four strong increases of three-quarters of a point.
The full effects of the actions of the powerful Federal Reserve are indeed taking time to be felt.
Therefore, “the time to slow the pace of rate hikes could come as early as the December meeting,” Fed Chairman Jerome Powell warned in late November.
Indeed, too sudden a brake could precipitate the US economy into recession in 2023.
However, the Fed favors another measure of inflation, the PCE index, whose November data will be published on December 23rd.
Although their finances are hurt by the sharp rise in prices, American consumers are also showing themselves to be more optimistic about a return to the nails of this inflation, showed a study by the New York Fed published on Monday.
They see inflation falling to 5.23% on average within a year. This is the lowest anticipation since August 2021.
“Any projection of inflation in 2023 must be considered particularly uncertain,” however warned economists Joseph Gagnon and Asher Rose, of the Peterson Institute for International Economics (PIIE), in a paper published on December 5.
“It is possible that food and energy prices will fall or that wages will rise more slowly than expected here, leading to an even faster drop in inflation. But the risks in the other direction seem greater,” they point out.