This largely reflects worsening global growth prospects, notably in Europe, which is suffering from the reduced flow of Russian natural gas, and in China, with its zero-COVID policy and property-sector difficulties. U.S. gasoline prices have fallen more than $ per gallon since June, reflecting the fall in oil prices and refinery margins and helping to slow the monthly increases in headline consumer prices.
However, core prices-those excluding food and energy-have continued to rise rapidly. In particular, inflation in core goods prices has been surprisingly strong, in part because the elevated demand for goods we saw during the height of the pandemic has taken longer to abate than previously anticipated. Still, there are reasons to expect core goods inflation to slow in coming months.