US inflation slowed sharply to 7.1% over past 12 months

WASHINGTON (AP) — Inflation in the United States slowed again last month in the latest sign that price increases are gradually cooling despite the pressures they continue to inflict on American households.

Consumer prices rose 7.1 per cent in November from a year ago, the government said Tuesday. That was down from 7.7 per cent in October and a recent peak of 9.1 per cent in June. It was the fifth straight slowdown.

On a month-to-month basis, the consumer price index rose just 0.1 per cent in November, down from 0.4% in October.

Even with last month's further easing of inflation, the Federal Reserve plans to keep raising interest rates.

On Wednesday, the Fed is set to boost its benchmark rate for a seventh time this year, a move that will further raise borrowing costs for consumers and businesses. Economists have warned that in continuing to tighten credit to fight inflation, the Fed is likely to cause a recession next year.

Tuesday's government report showed that inflation in November was slowed by less expensive gasoline, electricity and used cars, among other items.

Several trends have started to reduce price pressures, though they won't likely be enough to bring overall inflation back down to levels that Americans were used to anytime soon.

Economists expect the Fed to further slow its rate hikes next year, with quarter-point increases in February and March if inflation remains relatively subdued.

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