Consumer Prices Rise
Consumers paid more for goods and services last month than economists expected, according to Reuters.
What’s going on: “The consumer price index (CPI) rose 0.3% last month after nudging up 0.1% in November, the Labor Department’s Bureau of Labor Statistics said on Thursday. The cost of shelter accounted for the more than half of the increase in the CPI.”
- In the year through December, the CPI increased 3.4% after rising 3.1% in November.
- Reuters-polled economists had predicted a 0.2% gain on the month and a 3.2% increase on a year-on-year basis.
Core CPI: So-called core CPI—consumer prices excluding volatile food and energy prices—increased 0.3% in December, the same amount it did in November.
- Year over year, core CPI rose 3.9% in December, down slightly from 4.0% in November.
The backdrop: The data comes on the heels of last week’s jobs report, which showed a better-than-expected addition of 216,000 positions in the overall economy and 6,000 jobs in manufacturing.
What it means: “This data provides mixed comfort,” said NAM Chief Economist Chad Moutray. “On the one hand, core inflation continues to moderate, albeit at rates that remain higher than preferred. On the other hand, the uptick in costs in the latest data shows how stubborn prices can be, even with progress seen over the past year.”
- The Federal Reserve is likely to hold interest rates steady at its meeting this month, Moutray added, but start cutting them as soon as March.