Inflation in the United States rose less than expected in December, further evidencing that the Federal Reserve’s interest rate policy is creating steady downward pressure on prices.
The latest Consumer Price Index (CPI) data shows that inflation rose less than expected in December (+0.2% vs. +0.3%) but more than expected in November (+0.2% vs +0.1%), the Bureau of Labor Statistics (BLS) reported on Friday.
Meanwhile, core CPI — which excludes food and energy prices — was left unchanged at +0.3% in both December and November.
BLS recalculates its seasonal adjustment factors at the start of each year to better reflect price movements from the preceding 12-month period. Recalculated seasonally adjusted indexes and adjustment factors spanning from January 2019 to December 2023 are now available, the BLS states on its website.
Last month, Federal Reserve board of governors member Christopher Waller indicated that he was anticipating the revisions to see if the data confirmed whether or not the U.S. Central Bank was making progress on the inflation front.
“My hope is that revisions confirm the progress we have seen. But good policy is based on data and not on hope,” he said during an event at the Brookings Institution.
While Waller and other Fed participants were eyeing January for the revised CPI data, some economists suggest the revisions would not majorly impact future policy decisions.
“The revisions were much ado about nothing,” said Brian Jacobsen, chief economist at Annex Wealth Management in Wisconsin, Reuters reported. “This is becoming a trend where a Fed official mentions a data release once, and then everyone waits with bated breath only to find out that it’s a bunch of noise.”
However, some economists suggest the revisions support the Fed’s policy stance despite the strong U.S. economy.
“This should give more support to the Fed that strong growth and jobs are not causing an acceleration in inflationary pressures,” said Ellen Zentner, chief economist at Morgan Stanley in New York, per Reuters.
