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U.S. Inflation Notably Drops

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File: Shoppers shop at a retail store in Niles, Ill., on Feb. 19, 2022. U.S. inflation has dropped to its lowest level since before 2022

UPDATED TO INCLUDE PRESIDENT BIDEN COMMENTS: Consumer inflation in the United States slipped in December to the lowest level in over a year, government data showed on Thursday, signaling the worst of red-hot price increases may be over.

the consumer price index (CPI) rose 6.5 percent from a year ago last month, the smallest increase since October 2021, said the Labor Department.

The annual figure is also down from November's 7.1 percent spike.

"The index for gasoline was by far the largest contributor to the monthly all items decrease," said the Labor Department in a statement.

This more than offset increases in the shelter component, the department added, with elevated rents still boosting consumer costs.

Between November and December, CPI dipped 0.1 percent, the first time in around two years it logged a month-on-month contraction, data showed.

Inflation in the United States is clearly headed in the "right direction," President Joe Biden said Thursday, as government data showed consumer prices rising at the slowest pace in over a year.

"We still have more work to do though, but we're clearly moving in the right direction, and there's more breathing room in store for American workers and families," Biden told reporters.

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