December U.S. CPI Report Shows Inflation at a 3.4% Annual Rate, Above Expectations

The Bureau of Labor Statistics reported that the Consumer Price Index climbed 3.4% in December from year-ago levels—an increase from November’s 3.1% rate, but well below the January 2023 peak of 6.4%.

Core CPI, which excludes volatile food and energy costs, increased 3.9% in December over the last 12 months after rising 4.0% in November.

The CPI rose 0.3% in December from month-ago levels after rising 0.1% in November. Core CPI also increased 0.3%, matching the November increase.

The headline year-over-year rise of 3.4% in the CPI was higher than economists forecasts of 3.2%, as was the core CPI reading for the past year of 3.9%. The monthly overall increase of 0.3% and the core increase of 0.3% were also above the consensus forecast.

December CPI Report Key Stats

• CPI climbed 0.3% for the month after rising 0.1% in November.
• Core CPI climbed 0.3% after rising by the same amount in November.
• CPI increased 3.4% year over year after rising by 3.1% the prior month.
• Core CPI climbed 3.9% from year-ago levels after increasing 4.0% in November.

Food prices increased 0.2% in December after rising 0.2% in November. Food-at-home prices increased 0.1% over the month, while food-away-from-home (restaurant) prices increased 0.3%.

Energy prices were mixed overall for the month after dropping 2.3% the prior month. Utility (piped) gas service prices decreased 0.4%, fuel oil prices declined 5.5%, gasoline prices increased 0.2%, and electricity prices increased 1.3%.

In December, shelter prices increased 0.5% after rising 0.4% in November.

This article was partially generated by Wordsmith, an automated smart-text platform, using data from the Bureau of Labor Statistics. The article has been reviewed by Morningstar editors.