RALEIGH – N.C. State economist Dr. Mike Walden finds little comfort in Thursdays report that consumer prices fell slightly in December. In fact, he sees several areas of concern for the economy and warns that the fight against inflation is “far from over.”
“Although it was certainly good news that both the month-to-month and year-over-year inflation rates dropped in December, there is disappointment because the reduction was mainly due to one factor – significantly lower gas prices in December,” Walden tells WRAL TechWire.
” While lower gas prices were welcome, it is a worry that the moderation in price increases was not widespread. Indeed, if volatile energy and food prices are eliminated, the inflation rate for all other items rose significantly from November to December. And now we are seeing gas prices again rise at the beginning of 2023. ”
Consumer prices dip slightly in December indicating inflation is easing
Walden says the Federal Reserve, which has been raising interest rates aggressively for months, still has a fight on its hands.
“The conclusion is the task of bring inflation back to acceptable levels is far from over. The Federal Reserve still has more work to do in raising interest rates,” Walden explains.
If inflation wasn’t a bad enough problem, Walden sees the potential of a COVID return.
“And now there is a new worry – the highly contagious new COVID variant,” he says. ” One good-news item has been tremendous success in repairing the supply chain. But if the new COVID variant takes hold in the world and again cripples the supply chain, even this good news could disappear.”
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