Washington: US consumer prices increased by solid in December as rental accommodation and used cars maintaining their strong gains, culminating in the biggest increase in annual inflation in almost four decades, which strengthened hopes that the Federal Reserve would begin to raise interest rates as early as March.
Reports from the Labor Department on Wednesday followed on the heel of data last week showed the labor market in or approaching maximum work.
The Fed Jerome Powell seat on Tuesday said the US central bank stands ready to do what is needed to maintain high inflation from being “entrenched,” in testimony during the nominated hearing before the second four-year position as head of the bank.
“The Fed will be forced to start raising interest rates in March and depends on political pressure on them – from both sides of the hallway – they have to raise levels four times or more this year and have the potential for more than that next year,” said Chris Zaccarelli, Head of Investment for Independent Advisory Alliance.
The consumer price index increased 0.5% last month after rising 0.8% in November.
In addition to higher rent, consumers also pay more for food, despite a 0.5% increase in food prices less than in recent months.
Gasoline prices fell 0.5% after rising 6.1% in November and October.
In 12 months to December, the CPI jumped 7.0%.
It was the biggest year-old year since June 1982 and participated in a 6.8% increase in November.
Economists surveyed by Reuters have estimated that CPI rose 0.4% and shot up 7.0% in the year-to-year.
The economy is experiencing high inflation as a supply chain of covid-19 pandemic snarls.
High cost of living weighing on President Joe Biden’s approval.
US stocks opened higher amid relieved that last month’s price increase was in line with expectations.
The dollar fell against a basket of currencies.
The price of the US Treasury rises.
Inflation above the inflation target is far above the 2% Fed target and is also appointed with beginner wage pressure.
The government reported last Friday that the unemployment rate fell to a 22-month low of 3.9% in December.
The current money market price is around 85% of opportunities for rising interest rates in March, and a total of at least three rising quarter points at the end of the year.
Economists believe the year-to-year CPI level may peak in December or the possibility of doing so in March.
There are signs that supply congestion began to subside, with a survey of the Institute for Supply Management last week showed producers who reported increased shipping suppliers in December.
But surging Covid-19 cases, driven by Omicron variants, can slow progress towards the supply chain normalization.
Not including food components and energy that easily evaporated, CPI increased 0.6% last month after up 0.5% in November.
The core CPI called driven by rent, with a rental equivalent to the owner of the main residence, which is what the owner will receive to rent a house, up 0.4% solid for the third consecutive month.
Prices for used cars and trucks accelerated 3.5% after an increase of 2.5% in each of the previous two months.
The surge might reflect Hurricane Ida, which destroyed thousands of motorized vehicles among other properties.
The price of new motorized vehicles rose 1.0%, marking the ninth month in a row from the increase.
Lack of global semiconductor has weakened motorized vehicle production.
Prices for household furniture and operation rose 1.1%, while the clothing index jumped 1.7%, the biggest increase since January 2021.
Health care costs rose 0.3%.
Within 12 months to December, called CPI CPI accelerated 5.5%.
It was the biggest year of the year since February 1991 and participated in a 4.9% increase in November.
The core level of the year’s core is seen peaking in February.
US consumer inflation surged to high 40 new years
