Inflation eases in December, but prices remain stubbornly high

close video Fed’s Jerome Powell won’t back off inflation narrative: Kenny Polcari

SlateStone Wealth chief market strategist Kenny Polcari and former Dallas Fed adviser Danielle DiMartino Booth discuss if inflation is stabilizing faster than anticipated on ‘Cavuto: Coast to Coast.’

Inflation continued to cool in December, the latest sign that painfully high consumer prices are finally beginning to loosen their stranglehold on the U.S. economy. 

The Labor Department said Thursday that the consumer price index, a broad measure of the price for everyday goods including gasoline, groceries and rents, fell 0.1% in December from the previous month. Prices climbed 6.5% on an annual basis. 

Those figures were both in line with forecasts by Refinitiv economists, potentially giving the Federal Reserve a reason to further slow its aggressive interest rate hike campaign when policymakers meet next month. 

It marked the slowest annual inflation rate since October 2021 and the slowest monthly rate since April 2020, at the height of the COVID-19 lockdowns. Still, inflation remains about three times higher than the pre-pandemic average, underscoring the persistent financial burden placed on millions of U.S. households by high prices. 

Core prices – which strip out the more volatile measurements of food and energy – climbed 0.3% in December from the previous month, up from 0.2% in November. From the same time last year, core prices jumped 5.7%. Those figures were also in line with economists' expectations.

This is a developing story. Please check back for updates.