Inflation eased to 6.5% in December compared with 12 months earlier, the sixth straight year-over-year slowdown.
Behind much of the decline in overall inflation are falling gas prices. The national average price of a gallon of gas has tumbled from a $5 in June to $3.27 as of Wednesday, according to AAA.
Last week’s jobs report for December bolstered the possibility that a recession could be avoided. Even after the Fed’s seven rate hikes last year and with inflation still high, employers added a solid 223,000 jobs in December, and the unemployment rate fell to 3.5%, matching the lowest level in 53 years.
On Monday, the Federal Reserve Bank of New York said that consumers now anticipate inflation of 5% over the next year. That's the lowest such expectation in nearly 18 months. Over the next five years, consumers expect inflation to average 2.4%, only barely above the Fed's 2% target.
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