The increase in U.S. consumer prices eased again in December, dropping for the sixth straight month after reaching a four-decade high in mid-2022, the government reported Thursday.
The Bureau of Labor Statistics said its consumer price index rose at an annualized 6.5% pace last month, down from the 7.1% figure in November and off sharply from the peak of 9.1% last June. December prices edged down a tenth of a percentage point from November.
While U.S. shoppers might notice some relief when they pay for their groceries and other purchases, inflation is still well above the normal 2% figure that policy makers at the Federal Reserve, the country’s central bank, strive for.
Some U.S. economists are still predicting a recession in the U.S. economy, the world’s largest, later this year, but job growth has remained strong, with 223,000 new jobs added in December.
On Thursday, the Labor Department reported that applications for unemployment benefits fell last week to their lowest level in 15 weeks, to a total of 205,000. Jobless claims are generally viewed as an indicator of layoffs. Some high-profile companies, like the Goldman Sachs investment banking company and Cable News Network, have laid off workers, but plenty of other companies are still looking to hire more employees.
The U.S. unemployment rate is at 3.5%, a 53-year low.
Inflation, however, remains the main point of concern for Federal Reserve policy makers.
The central bank raised its benchmark interest rate seven times last year in an effort to slow job growth and increase the cost of borrowing for businesses and consumers alike, on the presumption that the higher loan costs would bring down inflation.
The strategy appears to be working, but only slowly.
The Fed has indicated it plans to raise rates another two or three times in the coming months before halting further increases but leaving the benchmark rate at a high level.
Editor’s note: An earlier version of this story included an incorrect figure for the total number of jobs added in December 2022.