U.S. Inflation Rate for December Is up 2.7%

The Labor Department reported the consumer price index for December rose 2.7% year‑over‑year and 0.3% from November; the Federal Reserve's federal funds target range is 3.50%–3.75% as reported in the article.

The consumer price index (CPI) measures changes in prices for goods and services and is a common gauge of inflation. According to the Labor Department's most recent report, CPI in December was 2.7% higher than one year earlier and 0.3% higher than in November. The article notes that inflation has eased in parts of the economy but that "sticky inflation" persists in areas like insurance, public transportation and rent. These figures are relevant to the Federal Reserve as it adjusts monetary policy to pursue price stability and employment. Key figures: - CPI December year‑over‑year: +2.7% (reported by the Labor Department). - CPI December month‑over‑month: +0.3% versus November. - Food: +0.7% month‑to‑month and +3.1% year‑over‑year. - Energy: +0.3% month‑to‑month and +2.3% year‑over‑year. - Shelter: +0.4% month‑to‑month and +3.2% year‑over‑year. - The article reports the federal funds target rate is between 3.50% and 3.75%, with the prime rate near 6.75%. Summary: The December CPI data show headline inflation has moved closer to the Federal Open Market Committee's 2% objective while some service categories remain elevated. The article reports the Fed has begun a rate‑cutting cycle and that major financial institutions expect additional cuts in 2026; unemployment trends are noted as a key focus for the FOMC. Undetermined at this time: the precise timing and size of future policy moves will depend on incoming economic data.