Inflation accelerated in December, with the Consumer Price Index rising by 2.9% from a year ago, up from 2.7% in November.
However, excluding the volatile food and energy categories, core inflation declined to 3.2% after remaining at 3.3% for three months, indicating underlying price pressures eased.
The big picture: The mixed picture for consumers is revealed in the report, with high prices for essentials such as groceries and housing, but apartment rentals and clothing costs saw minimal increases.
- If core prices continue to match December’s pace, inflation should move closer to the Federal Reserve’s 2% target.
- Some one-time price spikes, such as gas prices rising 4.4% in December, contributed to the overall inflation increase. Grocery prices and egg costs also rose, partly due to an outbreak of avian flu reducing egg supply.
