America’s inflation fever may be breaking at last

After a difficult two years, inflation appears to be easing its grip on the American economy. Overall prices increased by a mere 0.1% month-on-month in November, according to data published on December 13th, making for that rarest of recent occurrences: a downside surprise. More promising was a breakdown of the data showing that core inflation, which strips out volatile food and energy costs, had decelerated for a second consecutive month. Some of the underlying pressures which have pushed up prices are receding.

Investors and analysts, scarred by America’s relentless run of inflation, have learned to restrain their hopes after a single month of rosy data. Year-on-year rates of inflation remain high at 7.1% for headline inflation, and 6% excluding food and energy costs. But the disinflation in November follows a similarly cheerful batch for October. Optimism is on the rise, albeit still mostly of the cautious rather than the unbridled kind. The s&p 500 index of leading American…

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