U.S. inflation rose in December, but underlying price pressures showed signs of easing. Core inflation, which excludes volatile food and energy prices, declined to 3.2%.
WASHINGTON - U.S. inflation picked up last month as prices rose for gas, eggs, and used cars, yet underlying price pressures also showed signs of easing a bit. Wednesday's report from the Labor Department showed that the consumer price index rose 2.9% in December from a year ago, the highest since July, up from 2.7% in November. It was the third straight increase after inflation fell to a 3 1/2-year low of 2.4% in September.
Yet excluding the volatile food and energy categories, so-called core inflation declined to 3.2%, after remaining stuck at 3.3% for three months in a row. The slowdown in core price increases was greeted with relief on Wall Street, with Dow Jones futures pricing surging nearly 700 points on the report's release. Many economists and investors are worried that inflation has gotten stuck above the Fed's 2% target, after a steady decline in prices in 2023 and for much of last year. Such concerns have sent interest rates on Treasury securities higher, which has also pushed up borrowing costs for mortgages, cars, and credit cards, even as the Fed has been raising interest rates to try and cool the economy.
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