2024-01-11 15:22:02
WASHINGTON (AP) — Higher energy and housing prices boosted overall U.S. inflation in December, a sign that the Federal Reserve’s attempt to reduce inflation to its 2% target will likely remain bumpy.
Thursday’s report from the Labor Department showed overall prices rose 0.3% from November and 3.4% from 12 months earlier. Those increases exceeded the previous monthly increase of 0.1% and annual inflation of 3.1% in November. The December figures were slightly above economists’ forecasts.
Housing costs accounted for more than half of the price increase from November to December. Energy costs, led by electricity and gasoline, along with food prices, also contributed to the increase.
However, excluding volatile food and energy costs, so-called core prices rose just 0.3% month over month, unchanged from November’s increase. Core prices rose 3.9% from a year ago — the most moderate pace since May 2021 and down from November’s 4% year-over-year increase. Economists pay special attention to underlying prices because, by excluding costs that typically vary from month to month, they are seen as a better guide to determining the likely path of inflation.
Headline inflation has cooled more or less steadily since hitting a four-decade high of 9.1% in mid-2022. Still, the persistence of inflation helps explain why, despite economic growth constant, low unemployment and healthy hiring, polls show that many Americans are dissatisfied with the economy.
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