Inflation Moderated In December After Energy Prices Declined

Barry Adams
12 Jan, 2023
New York City

Benchmark indexes traded higher after the inflation report came in line with expectations. 

The Consumer Price Index inflation fell 0.1% in December from November and eased to 6.5% on an annual basis, the BLS reported Thursday. 

The inflation index declined for the first time since May 2020 and seems to have peaked at 9.1% in June 2020. 

Energy prices rose 7.3% and food prices advanced 10.4% from a year ago and price increases for both categories were smaller than the rise in November. 

Core inflation accelerated to 0.3% from November and eased to 5.7% from a year ago. 

Cost of shelter stayed elevated and increased 0.8% on a monthly basis and jumped 7.5% from a year ago.  

Despite the easing of inflation, price increases are still significantly ahead of the Federal Reserve's target of 2%. 

 

U.S. Indexes In Review 

Benchmark indexes struggled in early trading after consumer price inflation was in line with expectations.  

The S&P 500 index fell  0.1% to  3,965.62 and the Nasdaq Composite index dropped 0.2% to 10,913.17. 

Crude oil rose 90 cents to $78.31 a barrel and natural gas advanced 11 cents to $3.78 a thermal unit. 

The yield on 2-year Treasury notes eased to 4.21%, 10-year Treasury notes edged lower to 3.50% and 30-year Treasury bonds inched lower to 3.62%. 

 

European Markets 

European markets extended gains to 9-month highs on the expectations of moderating inflation worldwide and ahead of the U.S. inflation report later today. 

The indexes accelerated gains after the U.S. inflation eased to 6.5% in December on the sharp decline in gasoline prices and declined 0.1% from the previous month, the Bureau of Labor Statistics reported Thursday. 

The DAX index increased 0.8% to 15,071.75, the CAC-40 index advanced 1.1% to 6,998.64 and the FTSE 100 index traded higher 0.6% to 7,768.75. 

 Suedzucker AG rose as much as 2% before turning lower 3% to