U.S. consumer prices rise 0.3% in December as grocery costs jump

U.S. consumer prices rose 0.3 percent in December and were 2.7 percent higher than a year earlier, while food prices climbed 0.7 percent for the month — the largest one‑month increase in grocery prices since October 2022. Core prices, excluding food and energy, were up 0.2 percent for the month and 2.6 percent year over year.

Food gains included fruits and vegetables (+0.5 percent), coffee (+1.9 percent), cereal and bakery products (+0.6 percent) and beef and veal (+1 percent for the month, +16.4 percent year over year), while egg prices fell 8.2 percent. Lower gasoline, down 3.4 percent from a year earlier, trimmed a tenth of a point from the 12‑month inflation rate.

The report also contained the first month‑to‑month figures since September after a federal shutdown disrupted data collection. Officials said they will scrutinize upcoming reports as the Federal Reserve weighs interest‑rate policy; New York Fed president John C. Williams said the Fed was "well positioned" and conveyed little urgency for immediate cuts, reinforcing expectations the central bank will hold at its Jan.

27–28 meeting. The report noted a working paper finding that actual tariffs paid were about 14.1 percent at the end of September — roughly half the administration's announced rates — and quoted Harvard economist Gita Gopinath saying, "The actual tariffs are much lower than what were announced," a factor cited to explain why tariff effects on prices have been smaller than some predicted.

Key Topics

Business, Consumer Price Index, Grocery Prices, Federal Reserve, Tariffs, Donald Trump