The US inflation rate slowed to 6.5% in December, largely due to much cheaper gasoline.
The US Bureau of Labor Statistics said that on a monthly basis, the cost of living decreased by 0.1% from November to December. The main reason for this decline was a large drop in the price of gasoline.
Pump prices fell 9.4 percent for the month, US$3.27 per gallon on average across the country. This is the equivalent of approximately C$1.15 per liter.
In June, the average price of a gallon of gas topped $5.
Gas isn’t the only thing getting cheaper, as prices for a variety of physical goods like cars, clothing and furniture are slowly falling from record highs before the pandemic, when grocery chains Stuck supplies resulted in empty shelves for almost everything.
The prices of most physical goods are falling, while the costs of most services continue to rise. But overall, the drop in gasoline was enough to drag the overall annual inflation rate to 6.5% from 7.1%.
The December figures show that while the official US inflation rate is still more than twice the central bank’s target, the annual rate has fallen for six consecutive months.
“Inflation is cooling as the economy begins to feel the impact of the Fed’s previous rate hikes,” Oanda analyst Edward Moya said of the figures.