Inflation fell as expected possibly because of a bigger drop in spending than economists were spending, according to the latest data from the Bureau of Labor Statistics.
- Y-O-Y: Consumer prices rose 5.0% to end the year, down from 5.5% in November and down from the June high of 7.0%. Core PCE slowed to 4.4%, down from 4.7% in November and in line with economist predictions.
- M-O-M: Consumer prices rose 0.1% to end the year which was identical to what we saw in November. Core PCE prices were up 0.3% in December which is higher than the 0.2% reported in November but in line with what economists were projecting.
Spending & Income. Personal Consumption Expenditures fell 0.2% in December, this was a bigger drop than the 0.1% drop reported in November. However, spending was up 4.0% to end the year.
- Personal income rose 0.2% in December and ended the year up 6.0%.
Savings. Personal savings increased 16% from November, but the savings rate ended the year down significantly falling 57% from December 2022.