The inflation rate for consumer prices in the US has clearly peaked and is falling steadily.  The latest figure for year-on-year inflation in December was 6.4%, down from a peak of 9.0% last summer.  Core inflation (which excludes prices for food and energy) has also peaked but not by nearly as much.  That’s because it is food and energy price inflation that has slowed the most.  Energy price inflation has halved as oil and gas prices drop back and there has been a peak in food prices.  But housing costs continue to accelerate and other services prices fell only a little; so core inflation remains ‘sticky’. 

What the latest figures show is that the ‘supply shock’ to prices from supply chain blockages and shortages of food and energy supplies since the Russian invasion of Ukraine have eased somewhat.

Inflation may be subsiding as the US economy slows, but remember, the…