Inflation dropped to an annual rate of 6.5 percent in December, its sixth straight decline in as many months, the U.S. Labor Department said Thursday.
The December rate was down from 7.1 percent in November, while the consumer-price index, which measures what consumers pay for goods and services, rose at its slowest pace since October 2021, The Wall Street Journal reports, per the Labor Department.
The core CPI, which removes fluctuating food and energy prices, rose by 5.7 percent last month from a year earlier, in line with expectations.
The welcome news comes in the wake of declining gas prices and airfares, both of which have helped rampant inflation "meaningfully moderate," notes The New York Times. Still, it's probably too early to assume rising prices are totally under control, CNBC reports, per financial analyst Greg McBride.
"To truly feel as if we've hit peak inflation, we've got to see sustained improvement over a period of months, and across an expanding range of goods and services," McBride said.
Fed officials will soon decide whether to again raise interest rates at their meeting on Feb. 1, as they indicated they might in December, per the Journal. To that end, it seems the bank is likely at that point to opt for a smaller, quarter-percentage-point increase, rather than one of the larger revisions it made throughout last year.
"I expect that we will raise rates a few more times this year, though, to my mind, the days of us raising them 75 basis points at a time have surely passed," Patrick Harker, president of the Federal Reserve Bank of Philadelphia, said Thursday. "In my view, hikes of 25 basis points will be appropriate going forward."