US Core CPI Dipped

London: 12 December 2023 (TraderMade): A reprieve for consumers and businesses alike, the annual US core consumer price inflation rate, excluding volatile food and energy prices, dipped to 4% in November 2023 - its lowest level since September 2021. This welcomed decline matched market expectations, offering a glimmer of hope in the ongoing fight against inflation.

With the release of the US Consumer Price Index (CPI) report, eyes are fixed on the potential impact on the US Dollar and the Federal Reserve's monetary policy decisions. Shelter costs continued to be a crucial driver, with the index surging 6.5% over the past year, contributing to nearly 70% of the overall increase in the core index. This suggests that rising housing costs remain a significant pressure point for American households.

On a monthly basis, core consumer prices also delivered a positive surprise, rising by just 0.3% in November, in line with market forecasts. This modest increase and a subsequent 0.2% rise in October suggest potential for further stabilization in the coming months.

While the November data offers a much-needed respite, the fight against inflation is far from over. The Federal Reserve will likely remain vigilant, closely monitoring future data points and adjusting monetary policy required to achieve its 2% inflation target.