Consumer prices rose 0.5% in December, a slight slowdown from the 0.8% increase in November but still a strong gain, according to the U.S. Department of Labor.
Core costs rose: Food costs increased 0.5%, but energy prices declined 0.4%. Excluding these two categories, core consumer costs rose 0.6% in December.
Vehicle prices: The cost of used cars and trucks rose 3.5% in December. Prices for new vehicles increased 1.0%.
- Owing to supply chain challenges and the chip shortage, the automotive sector has seen a year-over-year price jump of 11.8% and 37.3% in new and used vehicles, respectively.
CPI: The seasonally adjusted consumer price index has increased 7.1% in the past 12 months, up from 6.9% in November and the fastest year-over-year pace since June 1982.
The NAM’s take: “Overall, price pressures for consumers remain very elevated,” said NAM Chief Economist Chad Moutray. “Automobiles exerted an outsized impact in this report, as noted above. The data are expected to stabilize over the course of this year, especially once bottlenecks start to abate. A more favorable base comparison in 2022 will also help.”
- “Yet, consumer prices are predicted to continue growing by more than consumers have become accustomed to in recent years, with core consumer inflation rising around 3.1% year-over-year by the end of 2022.”