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USA: Inflation drops to 6.5% in the last 12 months

FILE - A mechanic performs an oil change on a car at a shop, Wednesday, July 13, 2022, in Collingdale, Pennsylvania.  (AP Photo/Matt Slocum, File)
FILE – A mechanic performs an oil change on a car at a shop, Wednesday, July 13, 2022, in Collingdale, Pennsylvania. (AP Photo/Matt Slocum, File)

WASHINGTON (AP) — The rise in US consumer prices eased again last month, raising hopes that the economy’s grip on inflation will continue to ease this year and possibly require less drastic action from the US. the Federal Reserve to control it.

Inflation fell to 6.5% in December from 12 months earlier, the government said Thursday. It was the sixth consecutive slowdown year-over-year. On a monthly basis, prices actually fell 0.1% from November to December, the first such decline since May 2020.

The reading adds to growing signs that the worst inflation in four decades is gradually easing. Still, the Fed doesn’t expect inflation to slow enough to approach its 2% target until well into 2024. The central bank is expected to raise its benchmark rate by at least a quarter point when it meets. at the end of the month.

Despite gradually slowing down, inflation remains a painful reality for many Americans, especially given the rise in food, energy and rent that has taken place over the past 18 months.

For now, inflation is falling, including the national average price of a gallon of gasoline from a peak of $5 in June to $3.27 as of Wednesday, according to AAA.

Supply chain delays that previously inflated the cost of products have been largely resolved. Consumers have also spent less on physical goods and have opted more for services, such as travel and entertainment. As a result, the cost of goods, including used cars, furniture and clothing, has fallen for two consecutive months.

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