Inflation mixed but with encouraging signs in December, CPI shows
Add Axios as your preferred source to
see more of our stories on Google.
Inflation showed cooling signs at the end of 2024: The Consumer Price Index ticked up by 0.4% in December, but a measure that excludes food and energy prices slowed for the first time in four months, the Labor Department said on Wednesday.
Why it matters: Core inflation resumed a cooling trend, offering some optimism for policymakers ahead of an uncertain year.
- Officials at the Federal Reserve have projected fewer interest rate cuts in 2025 than previously estimated on the back of stickier inflation.
By the numbers: The Consumer Price Index rose at a slightly quicker pace than the 0.3% increase in the prior month, as energy prices surged by 2.6% in December alone. Gasoline prices shot up 4.4%.
- Over the year ending in December, CPI rose 2.9% — up from 2.7% in November.
Yes, but: Core CPI, a closely watched underlying measure of inflation that strips out food and energy costs, rose 0.2% in December. That breaks the four-month-long streak of 0.3% increases.
- Core CPI increased 3.2% in the 12 months through December, compared to the 3.3% in November.
The bottom line: Inflation has plunged from the sky-high levels seen in 2022. But the path to getting inflation to 2% — the level preferred by the Fed — has looked more arduous than previously thought.
- The data released on Wednesday offers a bit of hope after a months-long stall, though economists warn Trump's trade and immigration policies might further delay progress.
Editor's note: This story was updated with a new chart.
