• The Consumer Price Index (CPI) rose 6.5% year-over-year and just 0.1% month-over-month, according to
the latest numbers from the Bureau of Labor Statistics — relatively in line with most industry estimates.
The annual inflation rate has now fallen for six consecutive months.
• Core CPI, which removes food and energy prices from the calculation and is more closely tied to monetary
policy decisions, rose 5.7% over the past 12 months and 0.3% between November and December.
• Gasoline led all price declines, dropping -9.4% month-over-month and -1.5% year-over-year. Used cars
and trucks also saw significant cooling, falling -2.5% month-over-month and -8.8% year-over-year.
• Food and shelter costs continue to rise, with the former appearing to decelerate from 2022 price pressures.
The food index has risen 10.4% year-over-year, but after reaching a 1.1% monthly increase in July 2022,
food costs inflation has steadily slowed, registering a 0.3% increase in December.
• Stocks rose following the news, as markets hope these data signal a peaking of US inflation and a potential
upcoming slowdown in the Fed’s interest rate hikes.

• Results from the New York Fed’s latest Survey of Consumer Expectations, taken in December, show
consumers are growing more optimistic about the inflation outlook. Respondents expect one-year
inflation to grow at 5.0% in the 12 months ahead, down 0.2% from the November survey and the lowest
survey result since July 2021.
• Economists view consumer expectations as essential in actual inflation’s outcome, as they influence
consumer behavior that may self-fulfill the economic effect they predict. The New York Fed’s meter
reached a record high of 6.8% in June 2022 amid a 40-year high in inflation.
• Consumers expect gas prices to rise 4.1% over the next 12 months while projecting food prices will grow
7.6% over the same period. Projections for both figures declined month-over-month.
• Longer-term inflation expectations were little changed.

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