People walk past for-sale signs in the Financial District on the first day of the return to the New York Stock Exchange (NYSE) since the Christmas holiday on December 26, 2023 in New York City.
Spencer Platt | Getty Images
A key inflation indicator released on Friday showed that the rate of price increases cooled towards the end of 2023.
The Commerce Department's December personal consumption expenditures price index, a key indicator for the Federal Reserve, rose 0.2% month over month and rose 2.9% year over year, excluding food and energy. Economists surveyed by Dow Jones had expected increases of 0.2% and 3%, respectively.
On a monthly basis, core inflation rose from 0.1% in November. However, the annual rate fell from 3.2%.
Taking into account fluctuating food and energy costs, headline inflation also rose 0.2% over the month and remained stable at 2.6% per year.
The release is further evidence that inflation, while still high, is continuing to fall, potentially giving the Fed the green light to start cutting interest rates later this year. The central bank aims for a healthy annual inflation rate of 2%.
As inflation neared the Fed's target, consumer spending rose 0.7%, stronger than the 0.5% estimate. Personal income growth fell slightly to 0.3%, in line with the forecast.
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