US inflation eases again to 6.5% over the past 12 months

Rising consumer prices in the United States moderated again last month, bolstering hopes that inflation’s grip on the economy will continue to ease this year and possibly require less drastic action by the Federal Reserve to control it.

Inflation eased to 6.5% in December compared with 12 months earlier, the government says. It was the sixth straight year-over-year slowdown. On a monthly basis, prices actually slipped 0.1% from November to December, the first such drop since May 2020.

The softer readings add to growing signs that the worst inflation bout in four decades is gradually waning. Still, the Fed doesn’t expect inflation to slow enough to get close to its 2% target until well into 2024. The central bank is expected to raise its benchmark rate by at least a quarter-point when it next meets at the end of this month.

Even as it gradually slows, inflation remains a painful reality for many Americans, especially with such necessities as food, energy and rents having soared over the past 18 months.