An inflation measure watched by the Fed eases to 5.5%

Dec 22, 2022, 3:42 PM | Updated: Dec 23, 2022, 7:22 am
FILE - Shoppers are silhouetted against the sky as they arrives for a sale at a Best Buy store Frid...

FILE - Shoppers are silhouetted against the sky as they arrives for a sale at a Best Buy store Friday, Nov. 25, 2022, in Overland Park, Kan. On Friday the Commerce Department issues its November report on consumer spending. The report contains a measure of inflation that is closely watched by the Federal Reserve, which has aggressively tried to corral inflation this year by raising its key lending rate seven times. (AP Photo/Charlie Riedel, File)

(AP Photo/Charlie Riedel, File)

              FILE - Washing machines are displayed with other appliances at Sam's Appliances TV & Furniture, Thursday, March 25, 2021, in Norwood, Mass. On Friday the Commerce Department issues its November report on consumer spending. The report contains a measure of inflation that is closely watched by the Federal Reserve, which has aggressively tried to corral inflation this year by raising its key lending rate seven times. (AP Photo/Steven Senne, File)
            
              FILE - A mechanic drains oil from a car at an auto repair shop, Wednesday, July 13, 2022, in Collingdale, Pa. On Friday the Commerce Department issues its November report on consumer spending. The report contains a measure of inflation that is closely watched by the Federal Reserve, which has aggressively tried to corral inflation this year by raising its key lending rate seven times. (AP Photo/Matt Slocum, File)
            
              FILE - New cars are delivered to a dealer in Pittsburgh on Thursday, Sept. 29, 2022. On Friday the Commerce Department issues its November report on consumer spending. The report contains a measure of inflation that is closely watched by the Federal Reserve, which has aggressively tried to corral inflation this year by raising its key lending rate seven times. (AP Photo/Gene J. Puskar, File)
            
              FILE - Shoppers are silhouetted against the sky as they arrives for a sale at a Best Buy store Friday, Nov. 25, 2022, in Overland Park, Kan. On Friday the Commerce Department issues its November report on consumer spending. The report contains a measure of inflation that is closely watched by the Federal Reserve, which has aggressively tried to corral inflation this year by raising its key lending rate seven times. (AP Photo/Charlie Riedel, File)

WASHINGTON (AP) — A measure of inflation closely watched by the Federal Reserve slowed last month, another sign that a long surge in consumer prices seems to be easing.

Friday’s report from the Commerce Department showed that prices rose 5.5% in November from a year earlier, down from a revised 6.1% increase in October and the smallest gain since October 2021. Excluding volatile food and energy prices, so-called core inflation was up 4.7% over the previous year. That was also the smallest increase since October 2021.

On a month-to-month basis, prices rose 0.1% from October to November after rising 0.4% the previous month. Core prices rose 0.2%.

Inflation, which began surging a year and a half ago as the economy bounced back from 2020’s coronavirus recession, still remains well above the 2% year-over-year growth the Fed wants to see.

The central bank has raised its benchmark interest rate seven times since March in an attempt to bring consumer prices under control.

Higher prices and borrowing costs may be taking a toll on American consumers. Their spending rose just 0.1% from October to November and didn’t rise at all after adjusting for higher prices.

“We expect a deceleration in household spending as the Fed hikes rates further in 2023,” Rubeela Farooqi, chief U.S. economist at High Frequency Economics, wrote in a research note.

Americans’ after-tax income, however, rose 0.3% in November even after accounting for inflation.

The Fed is believed to monitor the Commerce Department’s inflation gauge that was issued Friday, called the personal consumption expenditures price index, even more closely than it does the Labor Department’s better-known consumer price index. CPI rose 7.1% in November from 12 months earlier, down from June’s 9.1% year-over-year increase, which had been the biggest such jump in four decades.

The PCE index tends to show a lower inflation rate than CPI. In part, that is because rents, which have soared, carry double the weight in the CPI that they do in the PCE.

The PCE price index also seeks to account for changes in how people shop when inflation jumps. As a result, it can capture, for example, when consumers switch from pricey national brands to cheaper store brands.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

FILE - Bryan Kohberger, who is accused of killing four University of Idaho students in Nov. 2022, a...
Associated Press

News groups ask Idaho Supreme Court to reject University slayer gag order

Thirty news organizations have asked the Idaho Supreme Court to overturn a gag order in a case against a man accused of stabbing four students to death.
23 hours ago
FILE- A woman worships a cow as Indian Hindus offer prayers to the River Ganges, holy to them durin...
Associated Press

Indian government asks people to hug cows on Valentine’s Day

NEW DELHI (AP) — India’s government-run animal welfare department has appealed to citizens to mark Valentine’s Day this year not as a celebration of romance but as “Cow Hug Day” to better promote Hindu values. The Animal Welfare Board of India said Wednesday that “hugging cows will bring emotional richness and increase individual and collective […]
23 hours ago
NYPD officer Baimadajie Angwang, a naturalized US citizen from Tibet, holds a news briefing outside...
Associated Press

The spy who wasn’t? New York police officer wants badge back

GARDEN CITY, N.Y. (AP) — On a September day in 2020, New York City Police Officer Baimadajie Angwang kissed his toddler goodbye and was about to drive to work when he was surrounded by rifle-toting FBI agents. You’re under arrest, the bewildered cop was told. The charge: Being a secret agent for China. Angwang, a […]
23 hours ago
A person walks in front of an electronic stock board showing Japan's Nikkei 225 index at a securiti...
Associated Press

Asian shares mixed after Wall St falls on rate hike worries

BANGKOK (AP) — Shares were mixed Thursday in Asia after Wall Street gave back some of its recent gains on persisting uncertainty over interest rates and inflation. Benchmarks declined in Tokyo, Seoul and Sydney but rose in Hong Kong and Shanghai. U.S. futures were higher while oil prices edged up. Wall Street retreated Wednesday following […]
23 hours ago
Commanding General of the U.S. Army's 25th Infantry Division based in Hawaii, Maj. Gen. Joseph Ryan...
Associated Press

US general to aggressors: Allies are battle-ready in Asia

MANILA, Philippines (AP) — American forces and their allies in Asia are ready for battle after years of joint combat exercises, a United States general said Wednesday, adding that Russia’s setbacks in Ukraine should serve as a warning to potential Asian aggressors like China and North Korea. U.S. treaty allies like the Philippines, Japan and […]
23 hours ago
FILE - The company logo highlights the grille of a 2021 Tacoma pickup truck on display in the Toyot...
Associated Press

Toyota reports 8% drop in Oct-Dec profit, keeps forecast

TOKYO (AP) — Toyota reported an 8.1% drop in fiscal third quarter profit Thursday, as a global shortage of computer chips and soaring raw material costs battering the auto industry hit Japan’s top automaker. Toyota Motor Corp.’s October-December profit totaled 727.9 billion yen ($5.6 billion), down from 791.7 billion yen the previous year. The company […]
23 hours ago

Sponsored Articles

safety from crime...

As crime increases, our safety measures must too

It's easy to be accused of fearmongering regarding crime, but Seattle residents might have good reason to be concerned for their safety.
Comcast Ready for Business Fund...
Ilona Lohrey | President and CEO, GSBA

GSBA is closing the disparity gap with Ready for Business Fund

GSBA, Comcast, and other partners are working to address disparities in access to financial resources with the Ready for Business fund.
SHIBA WA...

Medicare open enrollment is here and SHIBA can help!

The SHIBA program – part of the Office of the Insurance Commissioner – is ready to help with your Medicare open enrollment decisions.
Lake Washington Windows...

Choosing Best Windows for Your Home

Lake Washington Windows and Doors is a local window dealer offering the exclusive Leak Armor installation.
Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
An inflation measure watched by the Fed eases to 5.5%