Payam Javan: The latest report from the Commerce Department indicates a decline in the Federal Reserve’s preferred inflation measure, suggesting a relief in price pressures amid the central bank’s interest rate hikes.

U.S. consumer prices dropped by 0.1 percent last month from October but increased by 2.6 percent from November 2022. Core inflation, excluding volatile food and energy prices, rose 0.1 percent month-over-month and 3.2 percent year-over-year.

These figures exceed economists’ expectations, indicating progress toward the Fed’s 2 percent year-over-year inflation target and paving the way for potential rate cuts in 2024. Despite concerns about a recession due to rate hikes, the strong U.S. economy and job market have fueled optimism for a “soft landing” in achieving the inflation target without economic downturn.

The Fed’s preferred inflation gauge, the PCE price index, peaked at 7.1 percent in June 2022. The report also highlights a 0.2 percent increase in consumer spending and a 0.4 percent rise in personal income last month.