The inflation rate in the U.S. decelerated to 6.5 per cent in December, mostly due to much cheaper gasoline.
The U.S. Bureau of Labor Statistics said that on a monthly basis, the cost of living actually declined by 0.1 per cent from November to December. The biggest reason for that decline was a large drop in the price of gasoline.
Pump prices fell by 9.4 per cent during the month, $3.27 US per gallon, on average, across the country. That's the equivalent of roughly $1.15 Cdn per litre.
In June, the average price of a gallon of gas topped $5.
Gas isn't the only thing getting cheaper, as prices for a variety of physical goods like cars, clothing and furniture are inching down from record highs earlier in the pandemic, when snarled supply chains led to empty shelves for just about everything.
Inflation rates in the U.S. and Canada
Prices for most physical goods are dropping, while costs for most services continue to increase. But overall, the decline in gasoline was enough to drag the overall annual inflation rate down to 6.5 per cent from 7.1 per cent.
The numbers for December mean that while the official U.S. inflation rate is still more than twice as high as the central bank's target, the annual rate has fallen for six months in a row.
"Inflation is cooling as the economy starts to feel the impact of the Fed's earlier rate hikes," Oanda analyst Edward Moya said of the numbers.