United States: Inflation Continues to Slow

The US Consumer Price Index (CPI) edged down 0.1% in December following a 0.1% increase in November and a 0.4% advance in October. The index for all items less food and energy was up 0.3% in December following gains of 0.2% in November and 0.3% in October. The 12-month change in the all items index continued to decline, from 7.1% to 6.5%. The 12-month change in the all items less food and energy index also slowed, from 6.0% to 5.7%. US inflation continues to moderate, but price pressures appear to be easing more for goods than for services. Given the resilient labour market and sticky service prices, the Fed will need to keep tightening monetary policy at its upcoming meetings.