The rate of inflation are maintained by above the government's objectives This was driven by older housing and energy costs. The debate is growing about the impact of Federal Reserve rate hikes
The rate of inflation annual compounded in USA fell again in January for the seventh consecutive month, up to 6.4 %, one tenth below that recorded in December, according to data released this Tuesday by the Bureau of Labor Statistics (BLS).
On a monthly basis, however, consumer prices rise half a point while we analyze if the interest rate increases on the part of the Federal Reserve (Fed) will have an effect of Price reduction.
“The housing index was by far the largest contributor…accounting for almost half of the monthly increase for all items,” the report said, adding that the food and gasoline indexes also contributed.
At the same time, the consumer price report published by the government on Tuesday showed that the pressures inflationary pressures continue to be persistent in the US economy and should promote price increases throughout the year.
The index of consumer prices (CPI) rose 0.5% m/m in January as expected market notified Department of Labor, while the December CPI was revised downwards between -0.1% and -0.1%.
For his part, the Core CPI (price index that excludes fresh products and energy due to their high volatility) increased a 5.6% in one year, after advancing a 5.7% in December.
The Fed aggressively raised the policy rate to a maximum of 15 years last year to stop the rampant inflation.
He Federal Reserve goal is to control debt and spending, slow down hiring and relieve the pressure that many companies feel about increasing salaries to find or retain employees.
The Companies often pass on higher labor costs to customers in the form of higher prices, which fuels inflation.
Until now, the most of the slowdown in inflation is due to chains of smoother supply and prices lower gasoline prices.
However, the eight Federal Reserve interest rate hikes since March of last year they have not had an appreciable impact on the US labor market, which continues to function very well.
Unemployment fell to 3.4%, he minimum in 53 years, and job offers remain high. At the same time, the solidity of the labor market has helped support consumer spending, which is a big part of the American economy.
The average salaries are growing at a fast pace of around 5% year after year.
These salary increases, distributed by the entire economy, tend to drive up the price of labor-intensive services.
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Powell has pointed out in repeatedly the sharp salary increases as a factor driving service prices public and keeps inflation high, even when it is Other categories, such as rentals, are likely to fall.
Many economists expect that the inflation falls to around 4% At the end of the year.
But can stop there, as long as the Hiring and salary increases stay strong.
In that case, the Federal Reserve could be forced to keep interest rates high until 2024, or even continue to raise them this year.