NEW YORK - Consumer inflation in the United States is set to ease further in December, analysts say, in an encouraging trend that could bring some reprieve from rising interest rates.
As American households struggle with decades-high inflation, the Federal Reserve hiked its benchmark lending rate at a pace unheard of since the 1980s in hopes of cooling the world's biggest economy.
But analysts expect the consumer price index (CPI), a key inflation gauge, to flatline between November and December in figures due to be released Thursday.
The data point could add to signs that the worst of surging prices may be over.
"The trend is an encouraging one," Moody's Analytics economist Matt Colyar told AFP, noting that figures have come down from a recent peak.
But Rubeela Farooqi of High Frequency Economics warned that "rates of change remain well above levels Fed officials are comfortable with."
US consumer inflation climbed rapidly to a blistering 9.1 percent last June, a 40-year high, as the war in Ukraine sent global food and energy costs rocketing.
While annual CPI growth eased to 7.1 percent in November, it remains a far cry from the Fed's two percent target.
"A steep drop in gas prices" is behind the easing trend in December, said Ian Shepherdson of Pantheon Macroeconomics.
Prices at the pump -- a key symbol for US consumers -- dropped last month on lower global demand and falling oil prices, in welcome news to policymakers.
Airline fares and health insurance prices are set to fall too, said Shepherdson.
But stripping out the volatile food and energy segments, the "core" CPI index likely rose 0.3 percent thanks to elevated rents, he said.
This would be a slight pick-up from November's 0.2 percent reading, signaling that more work needs to be done.