The Consumer Price Index for December 2022 points to signs that inflation may be starting to ease.
“We’re moving in the right direction but we still have a long way to go,” said Greg McBride, Chief Financial Analyst for Bankrate.com. “We’re confident in saying we’ve seen peak inflation, but we still need to see more improvement and broader-based improvement.”
In December, the Consumer Price Index was 6.5% — that’s a smaller increase than what we saw in November and lower gas prices may be contributing to that change. The CPI shows gas prices dropped 1.5% in December compared to a year earlier.
“What’s made this bout of inflation particularly insidious is the fact that it’s hit hardest in categories that are absolute necessities – food, shelter and, at times, different components of energy,” McBride said. “Food and home have really kind of been the backbreaker for a lot of households.”
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Food prices – especially food at home – continued to see double-digit increases. Food at home jumped 11.8% over the year in December. Some of the biggest increases were seen in flour and prepared flour mixes, up over 23% over the year and egg prices jumped a whopping 59.9% over the year in December.
Economists say higher egg prices could hang on for months. The reason – they say – is that we’re seeing the deadliest bird flu on record, which is impacting almost every state.
In South Florida, the Consumer Price Index for December showed prices were 9.9% higher than they were a year earlier. You can read the regional report here.
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The Federal Reserve is keeping an eye on what prices are doing across the country as they prepare to meet next month. McBride said rate hikes are likely to continue this year, which is why he recommends prioritizing paying off variable interest-rate debt and boosting your savings.
“Credit card rates are at record highs and they’re going to continue to go higher,” he said. “Nothing will help you sleep better at night than knowing that you have money tucked away.”
McBride said the job market remains strong, so there may be options for you if you’re looking to get a second job to pay down debt or add to your savings. He also said even though we’re seeing the rate of increases starting to trend downward, what we pay for things is still much higher than before so it will likely be a while before consumers start to see some real relief.
You can read the Bureau of Labor Statistics’ latest CPI report here.
