Core inflation shows signs of deceleration, while shelter costs register their lowest growth rate since 2022.
The Consumer Price Index (CPI) rose by 0.4% in December, aligning with market expectations. Over the past 12 months, headline inflation increased by 2.9%. The Core CPI, which excludes food and energy, showed signs of deceleration with a 0.2% monthly rise, the lowest in four months. On an annual basis, it dropped to 3.2%.
Key components include:
Energy: Contributed 2.6% to the monthly increase, driven by a 4.4% rise in gasoline prices.
Food: Prices rose by 0.3% in December, with annual variations of 1.8% for food at home and 3.6% for food away from home.
Shelter: Increased by 0.3%, marking its smallest annual variation (4.6%) since January 2022.
These figures provide some relief for the Fed, reflecting a slowdown in core prices, which could pave the way for further rate cuts in 2025. For now, the rate is expected to remain between 4.25% and 4.50% at the upcoming January meeting.
Annual Variation (%) of the Consumer Price Index (CPI): General and Core CPI
December Brings Encouraging Signs in Inflation
Core inflation shows signs of deceleration, while shelter costs register their lowest growth rate since 2022.
The Consumer Price Index (CPI) rose by 0.4% in December, aligning with market expectations. Over the past 12 months, headline inflation increased by 2.9%. The Core CPI, which excludes food and energy, showed signs of deceleration with a 0.2% monthly rise, the lowest in four months. On an annual basis, it dropped to 3.2%.
Key components include:
These figures provide some relief for the Fed, reflecting a slowdown in core prices, which could pave the way for further rate cuts in 2025. For now, the rate is expected to remain between 4.25% and 4.50% at the upcoming January meeting.
Annual Variation (%) of the Consumer Price Index (CPI): General and Core CPI
Source: US Bureau of Labor Statistics