There was some good news on the inflation front yesterday, as the consumer price index (CPI) came in at +7.1% year-on-year, down from the +7.7% figure seen in October. On a month-to-month basis the index was only up 0.1% in November.
Although we have to remember that things overall are still more expensive than they were a month or a year ago — just that the pace of price rises has slowed — it's still unequivocally good news for everyone's piggy banks.
Saving for a rainy day
Indeed, a slowdown in inflation is just what American consumers needed, as recent data showed that the average saving rate for consumers had dropped to just 2.3% in October — its lowest level since 2005.
During the pandemic, the personal saving rate ballooned for a few months as consumers braced for the worst, skipping even modest luxuries and saving their stimulus checks for a rainy day. Now those rainy days have arrived, and saving is the luxury many can't afford.
