Inflation slowed further in December, a sixth month of easing prices

Inflation eased again in December, giving relief to households and businesses nationwide and offering more assurance to economic policymakers that price increases are pulling back after they soared to 40-year highs last year.

The latest inflation data, released Thursday by the Bureau of Labor Statistics, showed prices rose 6.5 percent in December compared with the year before — and fell 0.1 percent compared with November. It was the slowest rate of price increases in more than a year. Inflation is still well above normal levels, and the economy remains vulnerable to shocks that could send prices back up. But officials and American families alike have been desperate for signs that the Federal Reserves’s fight against inflation is working and that the economy will continue to stabilize in 2023.

“The Fed is likely preparing to pause [rate hikes] sometime before the middle of the year, and that’s about as good as you’re going be able to get,” Joe Brusuelas, chief economist at RSM, said of the inflation report. “But just remember: Go into a grocery store today, and look at the price of eggs. And remind yourself: Don’t get overexcited about inflation.”