US inflation eased for the seventh month in a row in January, but the pace of decline is beginning to level off, official figures out today reveal.
The pace of price increases in the world’s largest economy on an annual basis fell to 6.4 per cent, down from 6.5 per cent, according to the US Bureau of Labor Statistics.
Over the last month, prices increased 0.5 per cent, beating Wall Street’s expectations but climbing from a 0.1 per cent fall.
The new figures illustrate that the velocity of price pressures easing is losing momentum after higher petrol and energy prices have broadly dropped out of the numbers.
Core inflation – which strips out food and energy prices and provides a more accurate picture of underlying price tension in an economy – ran at 5.6 per cent in January, also topping analysts’ forecasts.
US Federal Reserve chief Jerome Powell and the rest of the federal open market committee are likely to take note of the deceleration in price increases as a signal that further interest rate hikes may be needed.
American rates have climbed at the quickest pace since the early 1980s, with the Fed bumping borrowing costs 425 basis points higher since March last year.
More to follow.
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