• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Editor's Pick Prices finally fell last month after 3.5 years of increases
Editor's Pick

Prices finally fell last month after 3.5 years of increases

by December 27, 2023
by December 27, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

New government data showed prices notching a monthly decline for the first time since April 2020, adding to an improving picture on inflation as the new year looms.

The Personal Consumption Expenditures Price Index (PCE), one of two major readings on inflation, fell by 0.1% between October and November, the Bureau of Economic Analysis said Friday — the first monthly decline in more than 3 1/2 years.

Combined with other recent data showing disposable personal income and consumer sentiment rising, the United States’ economy appears to be heading into 2024 on strong footing even as it cools down. That has boosted expectations for a potential “soft landing” that reins in inflation without triggering mass layoffs or a recession.

Lower gas prices and cheaper goods contributed to the modest decline in Friday’s PCE numbers. Because prices have largely continued to rise this year, they still clocked in 2.6% higher than in November 2022. But that’s an improvement from the PCE’s 5.5% yearly inflation rate back in January and 7.1% rate in June 2022.

Earlier this month, the Consumer Price Index, the other major inflation measure alongside the PCE index, showed annual inflation slowing to 3.1% in November, easing a bit from a 3.2% rate the month before.

“[T]he latest data confirm that the disinflation momentum is gathering pace,” EY senior economist Lydia Boussour said in a note, using the term for when price increases slow down — which is different from “deflation,” when prices outright drop.

As prices fell in November, American households’ capacity to spend increased, the BEA’s Friday report showed. Real disposable income, which adjusts for inflation, grew by 0.4% between October and November, after a summer of nearly no growth. 

A separate report that the University of Michigan released Friday showed consumer sentiment soaring 14% in December. The jump reversed four months of declines and reflects growing optimism among U.S. spenders, whose outlays account for about two-thirds of the economy.

“All age, income, education, geographic, and political identification groups saw gains in sentiment this month,” the University of Michigan survey’s director, Joanne Hsu, wrote in the report. “The index is now just shy of the midpoint between the pre-pandemic reading and the historic low reached in June 2022.”

That report came days after a different measure, the Conference Board’s consumer confidence survey, also showed Americans’ economic optimism surging this month.

“These trends are rooted in substantial improvements in how consumers view the trajectory of inflation,” Hsu said.

The battle isn’t over yet, though.

The Federal Reserve, which has raised interest rates to 22-year highs to slow the pace of price increases, has been encouraged by the progress but acknowledges there’s still work to do to get inflation down to its target of 2% on “core” PCE. That narrower measure excludes categories with more volatile prices, like energy and food — which can reflect swings due to geopolitical events and weather-related factors, respectively.

Core PCE clocked in at 3.2% in November, Friday’s BEA figures showed. Omair Sharif, the founder of Inflation Insights, cautioned that additional months of encouraging data would be needed to confirm that the Fed is on a clear path to its 2% goal.

“The more benign inflation data is certainly something to celebrate, but there is some turbulence ahead” in the first quarter of next year, he said in a note, that Fed officials will need to navigate before cutting rates.

This post appeared first on NBC NEWS
You Might Also Like
  • NFL hit with $4.8 billion in damages over ‘Sunday Ticket’ antitrust case
  • Inflation vs. wages: How rising prices stack up against growing pay
  • How sustainable diaper brand Kudos is taking on industry giants — with a Target rollout
  • Little-known NJ baby retailer tentatively wins rights to Buy Buy Baby’s IP for $15.5 million
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Navy shoots down ballistic missiles launched by Iran-backed Houthis in Red Sea
next post
Is FedEx’s Long-Term Uptrend in Jeopardy? Here’s What to Watch.

You may also like

Disney tops quarterly profit estimates, but starts to lose Disney+...

February 5, 2025

Amazon will start putting ads in Prime Video in push...

September 24, 2023

What Fitch’s downgrade of the U.S. government means for taxpayers...

August 3, 2023

Disney posts mixed results for quarter plagued by streaming woes,...

August 10, 2023

Caroline Ellison seeks to duck prison sentence for role in...

September 12, 2024

Judge temporarily blocks sports streaming service owned by Disney, Fox,...

August 18, 2024

Apple makes surprise decision to pause some Watch sales before...

December 19, 2023

JPMorgan Chase is opening more small-town branches in middle America

August 6, 2024

Inflation ticked up to 3.4% in December thanks in part...

January 12, 2024

U.S. added 275,000 jobs in February, more than expected — but...

March 10, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout, pulls outlook

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025
    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against strict U.S. chip controls

      May 7, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,633 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,339 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,320 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,303 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,186 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout,...

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Hooters to close ‘underperforming’ restaurants amid...

    June 26, 2024

    Rite Aid chain reportedly could sell...

    September 28, 2023

    Krispy Kreme stock plunges after doughnut...

    May 8, 2025
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here