The Federal Reserve's inflation index fell 0.1 percent in November, the first monthly decline in overall prices in more than three years, the website said.Axios“

The data released by the Commerce Department is the latest sign of easing inflation, driven by strong consumer spending and rising incomes.

US President Joe Biden described the news as a “significant milestone”, but added that “the work is far from over”.

The personal consumption expenditure price index rose 2.6 percent from the same month last year, nearing the 2 percent sweet spot targeted by central bank officials. Compared to last year, in October, there was an increase of 2.9 percent.

The index's monthly decline was 0.1 percent in November as energy prices fell 2.7 percent and food prices fell 0.1 percent.

Excluding volatile food and energy prices, the key index rose 3.2 percent from a year ago. It rose 3.4 percent in October. In November, the index rose just 0.1 percent.

Consumer spending rose 0.2 percent, with strong spending on items including recreational vehicles, clothing, shoes and furniture. Meanwhile, shoppers flocked to restaurants.

Excluding inflation, consumer spending rose 0.3 percent, faster than 0.1 percent in October.

Even when accounting for inflation, this spending was supported by higher disposable income, which rose 0.4 percent. That was up from a 0.3 percent rise in October.

The per capita savings rate, which is what is left over after deducting disposable personal income, rose to 4.1 percent.

Federal Reserve Chairman Jerome Powell said earlier this month the central bank wants to focus on interest rate cuts, with officials forecasting at least three more cuts next year.

In short, Axios points out, “a better combination for the Fed: inflation returning to pre-Covid-19 levels, where the economy is (for now) flat and consumer spending is healthy.”