Inflation is slowing, but still high. What you need to know

NEW YORK (AP) — After reaching 40-year highs over the summer, price increases in the U.S. are now steadily easing.

Consumer inflation slowed to 7.1% in November from a year earlier and to 0.1% from October, the government said Tuesday. Stripping out volatile food and energy prices, so-called core inflation rose 6% over the past 12 months and 0.2% from October.

Though inflation is slowing, prices remain steep, especially for food and many services.

Here's what you need to know:

WHAT'S GOING ON WITH INFLATION?

In recent months, there’s been a shift in inflation from goods to services.

In general, that means prices for goods and gas are rising more slowly than prices for things like dining out, travel, health care, financial services and hospitality. Prices for used cars, furniture, and appliances have moderated.

Food prices are an exception, driven by more expensive eggs, vegetables, and chicken.

Kathy Bostjancic, chief economist at Nationwide, noted that core goods prices — once you exclude food and energy — have been slowing dramatically. But services prices, excluding energy, have stayed near a 40-year high.

WHAT IS CONTRIBUTING TO THE SLOWING OF INFLATION?

Average gas prices have tumbled from $5 a gallon in June to as low as $3.26 a gallon, according to AAA, below their average a year ago.

Supply chain snarls are also coming to an end. Ports have cleared ship backlogs. And the cost of shipping a cargo container from Asia has returned to its pre-pandemic price.

The Federal Reserve’s series of aggressive interest rate hikes have also created downward pressure on prices by making borrowing steadily more expensive.

WHY ARE SERVICES PRICES RISING MORE THAN GOODS PRICES?

Some of it is the ongoing shift from the pandemic...