The Consumer Price Index (CPI) for December revealed a 2.9% increase in prices compared to the previous year, marking the highest inflation rate since July. Rising energy and food costs were the primary drivers behind this surge, placing a strain on household budgets. The Bureau of Labor Statistics reported a 2.6% increase in the energy index for December, while food prices also climbed 0.3% for the month.
Inflation surged in December, reaching its highest point since July, primarily fueled by escalating energy and food costs. The Labor Department disclosed the Consumer Price Index ( CPI ) for December, a comprehensive gauge of everyday expenses such as gasoline, groceries, and rent. The CPI revealed that prices were 2.9% higher compared to the previous year, following a 0.4% increase from the preceding month, exceeding the estimates of LSEG economists.
A substantial portion of the price surge can be attributed to rising energy and food costs, which are placing a considerable strain on household budgets. Over 40% of the monthly CPI increase was attributed to soaring energy prices. The Bureau of Labor Statistics' energy index witnessed a 2.6% rise in December, marking a reversal from the preceding months, which had exhibited minimal changes in energy prices and even a 0.5% annual decline in the previous month.Energy prices experienced a period of stability in July, followed by declines of 0.8% and 1.9% in August and September, respectively. However, they stabilized in October before escalating by 0.2% in November and recording a more significant 2.6% increase in December. Gas prices played a pivotal role in the energy index surge, jumping 4.4% in December. Similar to the broader energy index, gas prices had declined by 0.6% in August, 4.1% in September, and 0.9% in October before experiencing a year-end rebound with a 0.6% gain in November, preceding the larger increase in December. Moreover, the price of utility gas service also increased in December, rising 2.4% from the previous month and 4.9% on an annual basis.Food prices also exhibited a notable rise in December, advancing 0.3% for the month. Unlike the trend observed with energy prices, food costs have shown relatively consistent modest increases in recent months. Tracing back to June, the smallest monthly increases in food prices were 0.1% in June, July, and 0.2% in October. More substantial increases were recorded at 0.4% in September and November, leading up to the December CPI report. Within the BLS' food price index, the cost of food consumed away from home has escalated at twice the rate of food consumed at home over the past year, with the former rising 3.6% in the last 12 months compared to 1.8% for the latter. Eggs continued to experience significant price fluctuations among food items tracked by the BLS, surging 3.2% in December, pushing the 12-month increase to 36.8%. Egg supplies have been disrupted by an avian flu outbreak over the past year. The U.S. Department of Agriculture noted in a report this month, 'Supply remains the greatest challenge in the marketplace as highly pathogenic avian influenza (HPAI) continues to impact commercial table egg layer flocks into the new year.' Beef prices also witnessed faster price increases compared to overall food prices in December, both on an annual and monthly basis. Beef and veal prices climbed 0.5% in December from the previous month and are up 4.9% from a year ago
Inflation CPI Energy Prices Food Prices Household Budgets
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