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The Consumer Price Index rose 2.9 percent from a year earlier, but a measure of underlying inflation was more encouraging.
Year-over-year change in the Consumer Price Index
Jan. 15, 2025Updated 9:05 a.m. ET
Consumer prices rose more quickly in December, the latest sign that the Federal Reserve’s fight against inflation may have stalled.
The Consumer Price Index rose 0.4 percent from November, and was up 2.9 percent from a year earlier, the Labor Department said on Wednesday. It was the fastest one-month increase in overall prices since February, driven in part by another sharp rise in the price of eggs and other groceries.
The “core” measure of inflation, which strips out volatile food and fuel prices to give a better sense of the underlying trend, was more encouraging: The index rose 3.2 percent from a year earlier after three straight months of 3.3 percent gains. Forecasters had not expected core inflation to slow.
Inflation has cooled substantially since the middle of 2022, when it hit a four-decade high of more than 9 percent. More recently, however, progress has slowed, or even stopped outright: By some measures, inflation hardly improved in 2024.
“When you step back and look at the overall state of inflation, we’re not really going anywhere,” said Sarah House, senior economist at Wells Fargo. “While there has been progress, the pace has been really disappointing.”
Officials at the Fed have voiced increasing concern about the slow progress on inflation, and while some of the details in Wednesday’s report were encouraging, the data is unlikely to do much to ease those concerns.
