Overall, Thursday’s Consumer Price Index is good news for the country. The annual inflation rate is down to 6.5% — still high, but not as severe as the 7.1% pace seen in November.
A key takeaway is that months of interest rate increases from the Federal Reserve seem to be having the desired effect: slowing the economy and bringing down consumer prices.
But for many working families, times remain tough.
The CPI is heading south in large part because gas prices are falling (a good thing). But a closer look at the numbers reveals that consumers are still feeling the pinch in many areas.
Average food prices in December were up by 0.3%, but the cost of meat, poultry and fish rose by 1%.
Thanks to bird flu, the cost of eggs was up by as much as 11% last month.
Rents are also still rising, up by 0.8%.
Utility costs keep moving north, as do the costs of car repairs and insurance. Heck, even the price of drowning your sorrows is higher, with alcoholic beverages 0.5% higher.
Taken together, Thursday’s CPI underlines the challenges faced by many households. But the macro trend is positive, and that’s something.
The slower pace of inflation — now at the lowest level since October 2021 — suggests the Fed will ease up a bit and impose a quarter-point rate hike in February, possibly followed by one or two more quarter-point gains.
And then? If economists and CEOs are correct, we’ll see a modest recession later this year, followed by a swift rebound.
Followed perhaps by rate cuts to boost the economy.
It never ends. The trick is riding out the highs and lows, and hoping our monetary betters know what they’re doing.