December Inflation Rises, But Less Than Economists Expected

Consumer prices climbed in December, but the increase was milder than analysts had predicted, according to new data from the Bureau of Labor Statistics released Tuesday.

Core consumer prices—which strip out volatile food and energy costs—rose 0.2% for the month and 2.6% year-over-year. Both figures came in slightly below expectations. The broader Consumer Price Index, which includes food and energy, increased 0.3% monthly and 2.7% annually.

The numbers reveal a split in what's driving costs: grocery prices jumped sharply in December, while energy costs, particularly gasoline, dropped significantly.

Despite the softer-than-expected reading, inflation remains above the Federal Reserve's 2% target. Analysts note that economic data over the coming months could be distorted by the effects of the recent government shutdown—the longest in U.S. history—which disrupted federal data collection and reporting.