US consumer inflation held steady in December as gasoline prices fell and food increases accelerated, the Bureau of Labor Statistics reported today.
The consumer price index (CPI) rose at a 2.7pc annual rate in December, unchanged from November and in line with expectations in a Trading Economics survey of analysts.
Core prices, which strip out volatile food and energy, rose at 2.6pc pace in December, also unchanged from the prior month.
CPI peaked in 2025 at 3pc in September and in 2024 at 3.5pc in March. Inflation has gradually slowed as the US Federal Reserve has kept interest rates relatively elevated, prompting President Donald Trump to frequently deride Fed chair Jerome Powell for being "too slow" to cut rates.
The US Justice Department on Friday launched a criminal investigation of Powell for his testimony before the Senate Banking Committee in June about renovations to Fed office buildings. Powell, in a statement posted online Sunday, said the threat of criminal charges stems from the Fed "setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president".
On a monthly basis, prices rose in December by 0.3pc seasonally adjusted, following no changes in the prior two months.
The CME FedWatch tool showed a 97.2pc probability the Federal Reserve will hold its target rate unchanged at its meeting at the end of the month. A week ago, odds of holding rates steady were 82.3pc with a 17.7pc probability for a quarter-point cut.
Gasoline prices drop
Energy prices rose by 2.3pc in December, compared with a 4.2pc annual gain in November. Gasoline prices fell at a 3.4pc annual pace after rising by 0.9pc in November, while piped gas services rose by 10.8pc annually in December following a 9.1pc gain in the prior month.
US food price increases accelerated to a 3.1pc pace in December from an annual 2.6pc gain in November. Shelter rose by 3.2pc, up from 3pc in the prior month.
Services less energy services, a measure of core services prices, rose by 3pc, also unchanged from the prior month.
Prices for used cars and trucks rose at a 1.6pc annual pace in December, slowing from a 3.6pc gain in November.
New car prices rose at a 0.3pc pace, slowing from a 0.6pc annual gain in November.
Medical care services rose at a 3.5pc annual pace in December, accelerating from a 3.3pc gain in the prior month.
