Core inflation rate slows to 3.2% in December, less than expected
CNBCJAN 18
US Inflation Hits 2.9% as Energy Costs Drive December Increase
Above: Shoppers in a store in San Francisco, Calif., on Jan. 6, 2025, ahead of the US Bureau of Labor Statistics consumer price index (CPI) report on Jan.15. Image copyright: David Paul Morris/Contributor/Bloomberg via Getty Images
The Facts
The US Labor Department's Consumer Price Index (CPI) released Wednesday showed inflation grew by 0.4% to 2.9% annually in December, exceeding expectations of a 0.3% increase. This marks the third consecutive monthly increase and the highest level since July.
Core inflation, which excludes volatile food and energy prices, rose 0.2% monthly and 3.2% annually, showing a slight improvement from November's 3.3%, while energy prices surged 2.6% for the month, driven by a 4.4% increase in gas prices.
Shelter costs, comprising about one-third of the consumer price index weighting, increased 0.3% monthly and 4.6% annually, representing the smallest one-year gain since January 2022. Service prices, excluding rents, rose 4% from the previous year, with core services rising 0.3% for the third month in a row.
The Spin
Republican narrative
Another uptick in inflation should come as no surprise given the array of Democrat policies still plaguing the country. From collapsing the energy sector to printing massive amounts of money, Biden has left Americans under the weight of his unnecessary fiscal irresponsibility. Once in office, Trump must be careful when dealing with bureaucrats left over from the Biden administration, most notably in the Fed.
Democratic narrative
Despite Donald Trump's bombastic accusations ahead of his inauguration, the US economy is in a remarkably strong position. To the envy of many other developed countries, Biden brought America back to almost full employment while simultaneously cutting inflation down to the Fed's desired rate. Trump is about to waste all of this progress through his proposed tariffs, mass deportations, and trade wars.
Metaculus Prediction
Public Figures
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