US headline inflation accelerates unexpectedly
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The news: US headline inflation increased during December, with housing and vehicle costs driving up the cost of living for consumers.
The numbers: Headline consumer price index (CPI) rose to 3.4% year on year for the month of December, a 0.3% increase relative to November’s 3.1% print. Housing saw the largest monthly increase (excluding food and energy) by 0.5%, after rising 0.4% in November. Motor vehicle insurance also accelerated during December, climbing to 1.5%.
The context: The figures released by the US Bureau of Labor Statistics show the shelter index increased 6.2% over the last year, accounting for over two thirds of the total increase in the all items excluding food and energy index.
The 3.4% year on year inflation figure is higher than the 3.1% that had been anticipated by economists, according to S&P Capital IQ.
The figures raise questions around the timing of anticipated interest rate cuts from the Federal Reserve this year.
The source: US Bureau of Labor Statistics CPI Data
