U.S. inflation ended 2025 at 2.7 percent, core at 2.6 percent

Consumer prices were 2.7 percent higher in December than a year earlier, or 2.6 percent when excluding food and energy, the Bureau of Labor Statistics reported on Tuesday. The release was the last consumer-price reading before the Federal Reserve meets in two weeks to debate interest rates.

Surging grocery prices were offset by lower costs for appliances and vehicles, and the report suggested the 2025 tariff barrage had largely finished working its way into sticker prices. Samuel Tombs of Pantheon Macroeconomics said, “The real surprise in these numbers is that the tariffs just don’t really seem to be coming through any further into prices,” and the White House has delayed or rolled back some tariffs as collections, which brought in $287 billion last year, appeared to plateau.

Specific movements included a 1.1 percent monthly decline in used car and truck prices and a 1.6 percent rise over the year, flat prices for new vehicles and a roughly $50,000 average new-car price after recent increases. Appliance prices fell 4.3 percent in December and were down 1.7 percent over the year.

Airline fares jumped 5.2 percent in the month, while groceries rose 0.7 percent for December and 2.4 percent year over year, the fastest one-month grocery gain since 2022. Rents rose 3.1 percent year over year and the cost of owning a home was up 3.4 percent, measures the report said remain clouded by data problems from the government shutdown.

Key Topics

Business, Consumer Price Index, Bls, Federal Reserve, Tariffs, Grocery Prices