As energy prices fall, US inflation decreases

woman looking at milk

woman looking at milk

The US is seeing a dramatic drop in gasoline prices and energy costs, which are helping to lower the cost of living.

The US Labor Department reported that US inflation decreased to 6.5% from November’s 7.1%.

It was the lowest increase in more than one year and marked a sixth month of declines.

Prices for some items, such as bananas and oranges, fell in December compared to November.

The US authorities have been trying to stabilize prices. This happened in 2021 after the economy rebounded from pandemic lockdowns. Companies faced with shortages and rising prices pushed prices up.

The conflict in Ukraine, which has affected food and energy supplies, only made matters worse. In June, inflation reached 9.1% – the highest level in over four decades.

In an attempt to curb inflation, the US central Bank raised interest rates last year at the fastest pace for decades.

Jerome Powell, chairman of Federal Reserve, stated last month however that the bank would gradually reduce its aggressiveness to assess the economic results.

The Federal Reserve expects to reduce demand for high-priced items like homes and cars by increasing borrowing costs. This will help to slow down the economy and alleviate the price pressures that are pushing up prices.

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