ECONOMY
US Inflation Ticked Up Slightly In December
Shutterstock
U.S. inflation ticked up again in December, thanks largely to higher energy and housing costs, according to data released Thursday by the Bureau of Labor Statistics.
The Consumer Price Index increased 0.3% in December from November, and was up 3.4% from a year ago, a higher annual rate than the 3.1% in November, the agency reported.
The core CPI, which excludes more volatile food and energy prices, increased 0.3% for the month, unchanged from November, and 3.9% for the year, down slightly from 4% in November.
While food and energy prices are still ticking up, more than half the increase from November to December was the result of higher housing costs. Total shelter costs increased 6.2% year over year in December, while rents were up 6.5%.
The energy index rose 0.4% in December, after decreasing 2.3% in November. The gasoline index increased 0.2% in December, after falling 6.0% the previous month. Electricity rose 1.3% in December.
Despite December’s uptick, the rate of inflation is still cooling from a high of 9.1% in 2022. It may not be enough to move the Federal Reserve to bring interest rates back down, however, as it continues to work toward its target of 2% inflation.
The new data come after the agency announced last week that the U.S. added 216,000 jobs in December, up from 173,000 jobs in November and the unemployment rate held stead at 3.7%.
The Federal Reserve last month held interest rates steady for the third time in a row, after aggressive hikes since March of last year to combat inflation. The central bank maintained the target range for the federal funds rate at 5.25% to 5.5%, despite recent indicators of strong economic growth and a resilient labor market.
“Inflation has eased from its highs, and this has come without a significant increase in unemployment. Thats very good news,” Fed Chair Jerome Powell said, though he added that officials didn’t want to take the possibility of additional hikes off the table.
The Fed predicted it could lower its key interest rate by three-quarters of a point in 2024, indicating three typical cuts of a quarter point each.
But the prospect of a so-called soft landing, bringing inflation back down to 2% without a significant spike in unemployment, is still uncertain, Powell said.
“This result is not guaranteed, Powell said. It is far too early to declare victory.
TMX contributed to this article.
