US PCE inflation rate slows in November

Inflation in the United States slowed in November to 5.5% annual from 6.1% in October, according to the PCE index, used by the Federal Reserve (Fed) to adjust its monetary policy, published by the Department of Commerce.

In one month the rise in prices was barely 0.1% when in October it was 0.4 percent.

The measures taken by the Fed in the last nine months to curb inflation are beginning to show in the numbers.

“Today we learned that income is up and inflation is down (…) Another reason for optimism as the holidays and the new year arrive,” President Joe Biden celebrated through his Twitter account.

Data points to less investment momentum, but capex remains positive, for now. This moderation is likely to continue as demand shifts from goods to services due to rate hikes,” explained Rubeela Farooqi, HFE Chief Cabinet Economist.

Another gauge of inflation, the Consumer Price Index (by which pensions are indexed) also slowed sharply in November, to 7.1% from 7.7% in October.

That data was released the same week that the Fed Committee met to announce its monetary policy decision.

The Fed increased interest rates by 50 basis points, less than in previous months, but more than the usual quarter point. In addition, the entity warned that it is not yet the time to stop.

Inflation prospects fall

US consumers expect price pressures to ease markedly next year, as the University of Michigan Consumer Survey showed their one-year inflation outlook fell to an 18-month low in December.

The survey reported that the one-year inflation outlook fell to 4.4% this month, from 4.9% in November.

The figure was the lowest since June 2021 while the half percentage point drop in short-term inflation expectations in November was the biggest since September 2020.

Finally, the confidence index stood at 59.7 points, five points more than in November but it is 15% below the level of December 2021, when inflation began to show signs of acceleration.

Includes aid to Ukraine

US Congress approves more spending for 1.7 bdd

The Democratic-majority US House of Representatives approved a $1.66 trillion government funding bill on Friday. The lower house approved the bill by a vote of 225 to 201, one day after it received the green light from the Senate.

Conservative Republicans in the House of Representatives showed their discontent at the beginning of the debate, criticizing the overall cost of the bill, which they say is plagued by wasteful spending that has fueled inflation in the United States.

The bill passed the Senate on Thursday in a bipartisan 68-29 vote and will provide the Defense Department with a record $858 billion, up from $740 billion last year.

Ukraine will receive $44.9 billion in new emergency aid. (Reuters)