Gasoline pushes US inflation higher in December, core CPI undershoots
The cost of living in the US rose more quickly than expected at the tail end of 2024 as energy prices spiked higher.
Core inflation however undershot economists' forecasts.
According to the Department of Labor, the headline Consumer Price Index rose at a month-on-month pace of 0.4%, amid a 4.3% surge in petrol costs, and by 2.9% year-on-year.
The latter was up from the 2.7% clip observed in November and ahead of the 2.8% consensus forecast.
Core CPI, which omits food and energy due to their sometimes big swings in prices, increased by 0.2% on the month and 3.2% on the year (consensus: 3.3%).
New vehicle prices were up by 0.5% and those for used cars and trucks by 1.2%.
Of key importance, shelter prices rose by 0.3%, the same as during the previous month, and medical care services prices by only 0.2%.
Commenting on the latest figures, Thomas Ryan at Capital Economics said the latest data pointed to a "muted" increase in the core PCE inflation gauge of 0.14% in December.
That is relevant as the core PCE inflation index is the Fed's preferred price gauge.
Ryan said his forecast would imply a decline in the quarterly annual pace of PCE inflation back down from 2.5% to 2.1%, as opposed to the central bank's 2.0% target.
He also believed there was room for a "more marked decline" in core year-on-year PCE prices in January.
The economist added that shelter prices remained "somewhat sticky" and that new vehicle prices were likely to be supported by the wildfires in California.
As of 1444 BST, the yield on the benchmark 10-year US Treasury note was down by 14 basis points to 4.658% and the US dollar index by exactly half a percentage point to 108.73.