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Dec. 13 (UPI) -- The price for consumer goods in general in the U.S. economy increased less than the previous month, though food prices continue to accelerate, the federal government said Tuesday. The Consumer Price Index for all items increased by 0.1% in November, compared with a 0.4% rise the previous month. Year-on-year and consumer-level inflation increased by 7.1%, down from 7.7% in October and below the 9.1% peak from June.
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Lower inflation was welcome news for President Joe Biden, who said it's clear his economic plan is working, but he's "just getting started."
"I want to be clear it's going to take time to get inflation back to normal levels as we make the transition to a more stable and steady growth," he said.
This marks the fifth month in a row for a decline in inflation and represents the smallest 12-month increase since the similar period ending in December 2021. That, however, does not tell the whole story as prices for items such as food, education and apparel all saw gains last month.
Biden further said he was "just convinced" that prices are not going to go up and "convinced they're going to continue to go down."
My goal is simple: get prices under control without choking off economic growth, bring inflation down while keeping the labor market resilient, build an economy from the bottom up and the middle out, an economy with good jobs, good wages and for the long run, not a boom or bust economy," he said.
The price for food for at-home consumption increased by 0.1% from October levels and 12% year-on-year. The shelter component of CPI, meanwhile, increased by 0.6% over the month and was "by far the largest contributor to the monthly all items increase, more than offsetting decreases in energy indexes," the Commerce Department reported.
Energy prices have been on a steady decline since the start of November amid concerns that lingering inflationary pressures will push the global economy into a recession. The price for Brent crude oil, the global benchmark for the price of oil, was trading at around $80 per barrel early Tuesday, down from early-November highs of around $98 per barrel.
Retail gasoline prices are following suit. Prices peaked above $5 per gallon in June, but are charting a course toward $3 per gallon by year's end.
The decline in consumer-level inflation should set the tone for policy decisions from the U.S. Federal Reserve. A forecast from the Federal Open Market Committee and a rate decision from the Fed itself are expected on Wednesday.
Economists at the Organization of Petroleum Exporting Countries on Tuesday pegged U.S. growth in gross domestic product at 1.7% for the year and 0.8% for 2023. The slowdown could be welcome news for a U.S. Fed working to dampen inflation enough to cool the economy.
Speaking at a forum hosted by the Brookings Institution in Washington D.C. last month, U.S. Federal Reserve Chair Jerome Powell hinted that policymakers would be less aggressive with future rate hikes.
"It makes sense to moderate the pace of our rate increases as we approach the level of restraint that will be sufficient to bring inflation down," he said. "The time for moderating the pace of rate increases may come as soon as the December meeting."
The Fed is widely expected to increase its key rate by 50 basis points, or 0.5%, ending a steady string of 0.75% hikes over the course of the year.
Most market indices were in positive territory on the decline in U.S. inflation. The Dow was up about 1.5%, the S&P was up 2.3% as the tech-heavy Nasdaq was up 3.3% as of 9:45 a.m. EST. The dollar declined.
