Inflation in the United States: Decreased for the first time in three years, opening up prospects for consumers

In November 2023, inflation in the United States slowed for the first time in three years, indicating a positive trend in the economy and marking development despite negative economic forecasts. According to the Bureau of Economic Analysis of the US Department of Commerce, the price index for personal consumption expenditures (PCE) fell by 0.1% in November, the first monthly decline since April 2020.

According to Reuters, this was due to a 0.1% decline in food prices and a 2.7% decline in energy prices. On an annualized basis, the PCE price index rose by 2.6%, down from 2.9% in October. This is the first decline in the index below 3% in the last year.

The slowdown in inflation has led to an increase in consumer savings, with the savings rate rising to 4.1% compared to 4.0% in the previous month. This is seen as a positive signal for further spending. Consumers' disposable income after inflation and taxes grew by 0.4%, following a 0.3% increase in October.

Economists polled by Reuters had predicted that the PCE price index would remain stable in December and rise by 2.8% year-on-year. The core PCE price index showed an increase of 3.2% year-on-year, the smallest increase since April 2021. This is an important factor that strengthens the confidence of financial market participants in a possible Federal Reserve rate cut next spring.

On Thursday, December 21, the US government reported that core PCE inflation rose 2.0% year-on-year in the third quarter, which, along with a slight increase in November, pushed six-month core inflation to 1.9%.