14 December 2022 | Macroeconomics

U.S. inflation slowed more than expected

On Tuesday, there were some optimistic findings related to inflation levels in the U.S. The latest readings of important indicators showed a significant decline in November as inflation reached year record lows.

Prices increased by 7.1% annually in November. Note that the previous figure for the indicator was 7.7% in October.

November's data turned out to be more positive than 7.3% projected by specialists, and demonstrated a decline in inflation for the fifth successive month. The last time inflation fell to such a low level was in December 2021.

Moreover, core CPI turned out to be 6% on a yearly basis, while its October value was 6.3%. The monthly increase of the index was 0.2%, which is also a record low in 15 months.

But nevertheless, economists remain concerned about service sector inflation, which is still persistent and shows no signs of cooling. The core prices increased by 0.4% in this sector in November.

As it was stated by president of SS Economics Sung Won Sohn, a high level of uncertainty is still here. He noted that the labor market in the U.S. is already hot, especially in services — a number of job offerings is much larger than available labor supply. Such a situation leads to low unemployment level and rapid wage growth. As it was said by Sohn, the Fed’s attempts to slow down the economy would eventually have a restrictive impact on the labor market, but it’s unlikely to happen very soon.

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