Federal Reserve Chair Jerome Powell no doubt had started to relax about the economy. But then yesterday the Consumer Price Index increased over the last 12 months to 2.9%, making the third month in a row it has jumped. Core inflation less food and energy prices were up 3.2%.
Combined with last week’s release of the job numbers, it makes it more difficult for the Federal Reserve to consider a rate cut. The result is continued low-level economic uncertainty.
Energy price increases accounted for more than 40% of the all-items increase, climbing 2.6% month over month after a 0.2% increase in November. Shelter was up 4.6% the last 12 months, which was the smallest 12-month increase since January 2022.
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