US core inflation rises less than expected at 2.7% in December
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The news: Underlying US inflation rose by less than anticipated, signalling that price growth may be cooling ahead of the Federal Reserve’s upcoming rate decision.
The numbers: The US consumer price index increased 0.3% in December, putting the headline rate at 2.7%.
Core inflation, which strips out food and energy prices, posted a 0.2% rise on a monthly basis, and a 2.6% annual increase according to data from the Bureau of Labor Statistics. The figure led the annual core CPI to cool to a four-year low.
The context: Groceries and restaurant meals saw increases during the month, alongside rises across housing costs, recreation, transportation services and medical care. Household furnishings, fuel costs and used car and truck prices declined.
The Fed cut interest rates at the three final meetings of 2025 in efforts to soften the impact of a weakening labour market. US Federal Reserve officials will be closely watching Tuesday’s inflation data and are widely expected to hold rates steady at their upcoming meeting in two weeks’ time.
The sources: Bureau of Labor Statistics, WSJ, Bloomberg, CNBC
