US inflation eases as energy prices drop

Some items such as oranges and bananaseven saw outright price falls

In Summary
  • Authorities in the US have been fighting to stabilise prices, which took off in 2021 as the economy roared back to life after pandemic lockdowns and companies facing shortages and rising costs hiked prices.
  • The US central bank raised interest rates at the fastest pace in decades last year, in an effort to get the inflation problem under control.
Eggs on display at the Quickmart Moi Avenue Store
Eggs on display at the Quickmart Moi Avenue Store
Image: JACKTONE LAWI

A sharp drop in energy prices, in particular gasoline, is helping to ease cost-of-living pressures in the US.

US inflation was 6.5% over the 12 months to the end of December, down from 7.1% in November, the US Labor Department said.

That was the smallest increase in more than a year, and marked a sixth month in a row of declines.

Some items such as oranges and bananaseven saw outright price falls in December compared with November.

Authorities in the US have been fighting to stabilise prices, which took off in 2021 as the economy roared back to life after pandemic lockdowns and companies facing shortages and rising costs hiked prices.

The war in Ukraine, which hit food and energy supplies, made the problem worse, sending inflation to 9.1% in June - the highest rate in more than four decades.

The US central bank raised interest rates at the fastest pace in decades last year, in an effort to get the inflation problem under control.

But Federal Reserve chairman Jerome Powell said last month that the bank would start to move less aggressively to see how the moves are playing out in the economy.

By boosting borrowing costs, the Federal Reserve is expecting to dampen demand for expensive items such as homes and cars, helping to slow the economy and ease the pressures pushing up prices.

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