Following a surprisingly cool inflation report in November, inflation held relatively stable in December, ticking up only slightly, according to the latest U.S. Bureau of Labor Statistics’ (BLS) monthly inflation report.
The consumer price index (CPI) increased 0.3% on a seasonally adjusted basis in December and rose 2.7% year-over-year, the BLS reported Jan. 13. That follows the 0.2% monthly rise from September to November and matches the previous report’s annual inflation figure of 2.7%.
The index for shelter rose 0.4% in December and was the largest factor in the all items monthly increase, the BLS reported in its final inflation report of 2025. The food index increased 0.7% over the month as did the food at home index and the food away from home index. And the index for energy rose 0.3% in December.
Core inflation, which excludes volatile food and energy prices, rose 0.2% in December and 2.6% annually, the same as in November.
“These numbers represent an encouraging sign of price stability in an uncertain period, although these numbers are still above where the Fed would like them to be,” said Justin Ladner, senior labor economist at SHRM.
He added that he does not anticipate the Federal Reserve altering any forthcoming decisions about interest rates. “There is a broad consensus that the Fed will lower rates further at some point this year, but extent and timing of these cuts remain unclear,” Ladner said.
Still, some economists say that the inflation numbers should be taken with a grain of salt as the previous inflation report was significantly disrupted by the government shutdown and figures are catching up.
The latest inflation data comes as many U.S. employees are concerned about their financial picture in the year ahead. Roughly one-third of Americans think their personal finances will worsen in 2026, according to Bankrate’s recent Financial Outlook Survey. That’s the highest level of pessimism since 2018. Comparatively, 23% thought their finances would worsen in 2025. Continued high inflation was the top reason cited by those who expect their personal finances to get worse in the coming year.
Real Earnings Stable
Meanwhile, real average hourly earnings for all employees were unchanged from November to December, seasonally adjusted, the BLS reported separately today. This result stems from an increase of 0.3% in average hourly earnings combined with an increase of 0.3% in the CPI.
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