The inflation rate in the United States fell by a tick in January and reached 6.4% year-on-year

The annual rate of inflation in the states The United States continued to fall in January, for the seventh consecutive month, and was at 6.4%a tenth below that of December, according to data offered on Tuesday by the Bureau of Labor Statistics (BLS, in English).

However, in monthly terms, consumer prices increased by half a point, at a time when It analyzes whether interest rate hikes by the Federal Reserve (Fed) have an effect on lower prices.

“The housing index was by far the largest contributor…accounting for almost half of the monthly increase for all items,” the report said, adding that the food and gasoline indices also contributed.

Meanwhile, the consumer price report released by the government on Tuesday showed that inflationary pressures in the US economy remain stubborn and are likely to fuel higher prices for much of the year.

He The Consumer Price Index (CPI) rose 0.5% m/m in January, as market expectedreports the Ministry of Labor, while the CPI for December was revised upwards, from -0.1% to 0.1%.

For its part, the core CPI (a price index that excludes fresh food and energy due to its high volatility) rose 5.6% year on year, after rising 5.7% in December.

The Federal Reserve has aggressively raised its benchmark interest rate over the past year to its highest level in 15 years in its quest to contain runaway inflation. The Federal Reserve’s goal is to rein in borrowing and spending, slow the pace of hiring, and ease the pressure many businesses are feeling to raise wages in order to find or keep workers. Businesses often pass on their higher labor costs to their customers in the form of higher prices, helping to fuel inflation.

Until now, most of the slowdown in inflation reflects smoother supply chains and lower gasoline prices. But the Federal Reserve’s rate hikes – eight since March last year – have had no discernible effect on the US labor market, which remains exceptionally strong.

The unemployment rate has fallen to 3.4%, its lowest level in 53 years, and job vacancies remain high. In turn, the strength of the labor market has helped support consumer spending, which underpins much of the US economy.

Median wages are growing at a rapid pace of about 5% from a year ago. These wage increases, spread across the economy, are likely to inflate the prices of labor-intensive services. Powell has often pointed to large wage increases as a factor driving up utility prices and keeping inflation high, even though other categories like rent are likely to slow their prices.

Many economists expect inflation to fall to around 4% by the end of this year. But it could stagnate at this point as long as hiring and wage increases remain strong. In this case, the Federal Reserve could be forced to maintain high interest rates until 2024, or even to continue to raise them this year.

(With information from EFE, Reuters, AP)

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