December CPI: The Sting of 7%

Summary December’s 0.5% increase in the Consumer Price Index marks a slowdown from November’s gain, but the relative size should not detract from the absolute size which shows prices continue to rise at a menacing pace. The ongoing strength of inflation was underscored by the year-over-year change rising to 7%, which is the largest increase in nearly 40 years. If CPI inflation is still around 7% heading into the March FOMC meeting, as we expect it to be, it will be hard for the Fed to stand by idly. No Relief Heading into 2022 A remarkable year of inflation ended with a bang in December. The Consumer Price Index (CPI) rose 7.0% over the past year, the largest one-year change since 1982. Price growth moderated somewhat on a monthly basis, with the CPI advancing 0.5% compared to a 0.8% gain in November. But that still translates to a 5.8% annualized rate of change—far above the Fed’s goal and highly visible to consumers whose earnings have not kept pace with prices this past year. READ FULL ARTICLE>>