By Lucia Mutikani
Washington (Reuters) -The US inflation has increased the most in the eight months of December, among the robust consumer spending on products and services.
A report from the Ministry of Commerce on Friday has shown a little profit every month, excluding volatile food and energy components, but the so -called core inflation has not slowed down since October. The excavation stagnated in the fourth quarter.
The US Central Bank has not been changed for the first time on Wednesday since the policy easing cycle was launched in September. The policy statement accompanied by the decision did not include the “progress” inflation for 2 % of the Fed. The outlook for inflation is cloudy due to the uncertainty of President Donald Trump’s finances, trade, and immigration policy.
“The Fed prognosis is because the economy is progressing smoothly, and the price is slowly returning to the target in a large uncertainty environment, so the pace of monetary easing to move forward is slow.” We support strategy.
The price index for personal consumption expenditures (PCE) increased by 0.3 % last month, and after 0.1 % in November, the Ministry of Commerce has stated that it has been the largest increase since last April.
The increase was in line with the expectations of the economist. Product prices have risen 0.2 %, rising for the first time in five months, high costs for automobiles and parts, and increased gasoline and other energy goods by 4.2 %.
The price of furniture and durable home supplies has plummeted as if you went for recreation products and vehicles. Service costs have increased by 0.3 % in the benefits of transportation, recreation, housing and utility.
From December to December, PCE inflation rose 2.6 %. It was the biggest profit in seven months, increasing 2.4 % in November.
This data was included in the fourth quarter -in -develop domestic production report released on Thursday. The Fed tracks PCE price measures for monetary policy. Since September, the percentage interest rate on the benchmark has been reduced by 100 Basis points to 4.25 % to 4.50 %.
This year, the central bank decreased from the four predicted in September, paying attention to the new Trump administration’s tax reduction plan, a wide range of tariffs on imports, and the pressure of immigrants that economists considered inflation. We only predict the reduction of the two tax rates.
The story will continue
Price reduction is not expected by June. The PCE price index, which deprived the volatile food and energy components, increased by 0.2 % last month due to an increase of 0.1 % in November. From December to December, core inflation rose 2.8 % and rose with the same margin for three consecutive months.
Some economists are from the Labor Bureau of Labor Bureau of Labor Bureau of Labor Bureau, and from the Labor Bureau of Labor Bureau, indicating a slight increase in labor costs in the fourth quarter. Emphasized another report. Core inflation rose 2.2 % in three months until December.
“As reported in the recent Fed, it will be a welcome news in the Fed. The committee will be patient when considering further reducing interest rates. We will still be on hold until the end of the year. I am. “
This week, Fed Chair Jerome Powell showed that policy proprietors were watching 12 months inflation.
The stock in Wall Street was high. The dollar has progressed to a currency basket. The yield of the US Treasury will rise.
Labor costs increase
The employment cost index (ECI), the largest scale of labor costs, increased by 0.8 % in the fourth quarter and increased by 0.9 % in the fourth quarter. In 12 months from December to December, labor costs rose 3.8 %. This was the slowest since the third quarter of 2021 after increasing 3.9 % by September.
The ECI is considered to be one of the better scales of the labor market slack by policy proprietors, and is considered a core inflation prediction factor to adjust the changes in composition and work quality.
“The ECI is still in line with the stability of the price as long as the labor productivity continues to increase by about 2 % year -on -year,” said Sal Guatieri, Sal Guatieri, an advanced economist of BMO Capital Markets.
“However, expulsion of the country can add some pressure.”
Concerns about tariffs helped consumers in a hurry to avoid higher prices and supply power to consumer spending. Consumer spending gained the fastest growth pace in nearly two years in the fourth quarter, and maintained the economy.
Consumer spending, which accounts for more than two -thirds of US economic activities, increased by 0.7 % in December after revising 0.6 % in November. It was previously reported that the expenditure increased by 0.4 % in November.
Product spending increased by 0.9 %, as well as cars, food, gasoline and other energy products. Services have increased by 0.6 % in the significant profits of housing and utility, transportation, health care, and other services.
Economist expects the pre -purchase in January to continue in January.
Adjusted according to inflation, consumer expenditures rose 0.4 % and set an economy on a higher growth orbital to the first quarter.
After 0.3 % in November, personal income increased by 0.4 %. If expenditures exceeded their income, the savings rate dropped to the first low in two years, 3.8 %, from 4.1 % in November.
Some economists argued that low savings ratio would not promote further profits of consumer spending after tariffs. Others were not worried.
Nancy Vanden -Houten, an Oxford economic US economist, states:
(Report by Lucia Mutikani, edited by Chizu Nomiyama and Paul Simao)
