WEST SPRINGFIELD, Mass. (WWLP) – For the first time in nearly three years, inflation fell on a month-to-month basis. Inflation dropped back in December to 6.5%, but the Fed is likely to keep interest rates high.
According to the U.S. Department of Labor, the consumer price index fell by .1%. In December, the largest monthly drop since April 2020. The consumer price index measures the cost of a broad range of consumer goods and services.
Even though inflation went down .1 percent as we’re seeing improvements in prices, shoppers are still finding their grocery bill is expensive.
“Gas has certainly reduced in cost so that is helpful,” said Suzi Silver of West Springfield. “The grocery store not so much yet but fingers crossed.”
Gas prices dropped 20 cents in Massachusetts over the last month, but the cost of food increased by .3 percent nationally.
While the price of bacon declined slightly, the cost of eggs continues to rise.
“I think the chickens are made out of gold lately,” said Diane Hill of Agawam. She said this jump in prices over the last year or so has been challenging because she’s on a fixed income and that’s impacted how she shops.
“You’ve got to think twice about what you really need and what you can go without,” Diane said. “It’s becoming not a want, it’s what you really do need.”
Federal Reserve has used interest rate hikes to combat inflation, it is expected they could still raise it a quarter of a percent on February 1st after the last few hikes were .75 percent.
The slowing rate of inflation is a positive sign, it indicates that the Federal Reserve’s interest-rate hikes are working,
Now all eyes are on Chairman Jerome Powell at this time he has not announced any near-term plan. To significantly pull back from those increases until inflation gets closer to 2%.