December CPI Report shows tariffs did not drive broad goods inflation

The Bureau of Labor Statistics' December Consumer Price Index showed core goods were flat for the month while services continued to rise, and overall annual inflation was reported at 2.7 percent.

The Bureau of Labor Statistics released the December Consumer Price Index, which shows core goods (commodities less food and energy) were flat for the month while several services categories continued to rise. The December readings come after 2025 tariff measures and have been treated as a test of whether those tariffs passed through to consumer prices. Categories tied to imports — including new vehicles, used cars and appliances — showed little or negative change in December. At the same time, shelter and many services subcomponents recorded notable annual increases. Key figures: - Core goods (commodities less food and energy) were flat in December (0.0 percent for the month). - New vehicles were flat, used cars fell 1.1 percent in December, and appliances fell 4.3 percent for the month. - Core goods inflation ran 1.4 percent for the full year, while overall annual CPI was 2.7 percent. - Services rose 3.3 percent year-over-year, with shelter up 3.2 percent annually. - Food away from home rose 4.1 percent annually, and recreation services increased 4.0 percent for the year, with December posting the largest one-month recreation-services gain since the index began in 1993. Summary: The December data shows disinflation or small declines in many goods categories while services remain the principal source of year-over-year inflation. How policymakers and markets interpret these patterns going forward will depend on subsequent reports and is undetermined at this time.