US Inflation matches expectations, rises to 2.9% in December

Annual inflation in the US accelerated in December, aligning with expectations, and marking its highest reading since July 2024.

Data released on Wednesday showed that the annual inflation rate rose to 2.9% in December, on a seasonally unadjusted basis, from 2.7% in November, in line with forecasts.

However, core inflation—which excludes volatile food and energy prices—dipped slightly to 3.2% from 3.3% in November, contrary to expectations to remain unchanged.

On a monthly basis, the consumer price index (CPI) increased by 0.4% in December, following a rise of 0.3% and 0.2% in the preceding two months.

Meanwhile, the core CPI rose by 0.2% in December, easing from its steady 0.3% monthly increase over the previous four months, according to the data.

The monthly rise in the overall CPI was driven by higher prices for shelter, airfare, used cars and trucks, new vehicles, motor vehicle insurance, and healthcare. However, prices of personal care and communication costs declined.

Food prices increased by 0.3% on a monthly basis in December, down from a 0.4% rise in November. Energy prices, however, surged by 2.6% month-on-month, compared to a modest 0.2% gain in November and no change in October.