The Best Inflation News This Week Actually Came Out of Congress

Inflation slowed again during December, offering further hope that the worst of last year’s price increases is now in the past.

And maybe there’s reason to hope that lawmakers have learned a lesson about how government policy worsened that crisis, too.

Bureau of Labor Statistics data released Thursday morning show that prices were 6.5 percent higher in December than they had been 12 months earlier. That’s down from the 7.1 percent annualized inflation rate posted in November and far better than the peak rate of 9.1 percent in June. The falling number is undoubtedly welcome after the past year, even though 6.5 percent inflation far exceeds the Federal Reserve’s goal and would have been seen as absurdly high less than two years ago.

One further encouraging sign: So-called core inflation, which filters out more volatile categories like food and fuel prices, rang in at a reasonable 3.1 percent over the final three months of 2022. Overall inflation was just 1.8 percent during that same period. That means additional declines in the top-line rate should be coming throughout the first half of 2023, as the early months of 2022 drop out of the annualized rate calculation.

Even so, the details of December’s consumer price index report are a bit of a mixed bag. The overall decline in prices was driven by lower prices for gasoline, airfare, and used cars.

But housing and food prices continued to batter Americans’ wallets in the final month of the year. Housing prices were up 0.8 percent in December and have increased by 7.5 percent over the past year. Grocery prices have climbed by 11.8 percent in the past 12 months. That’s staggeringly high, but actually represents the lowest annualized rate for food prices since April.

Last year’s runaway inflation had several causes: the massive surge in pandemic spending that bulged household budgets, the Federal Reserve’s monetization of piles of pandemic-era