Prices consumers pay for a variety of goods and services rose more than expected in December. That's according to a Labor Department measure on Thursday that shows inflation still has a grip on the U.S. economy.
The consumer price index rose 0.3% for the month, above estimates of 0.2% at a time when most economists and policymakers expect inflation pressures to ease. On a 12-month basis, the consumer price index closed 2023 with an increase of 3.4%. Economists polled by Dow Jones were looking for levels of 0.2% and 3.2%, respectively.
Excluding fluctuating food and energy prices, the so-called core CPI rose 0.3% and 3.9% year-on-year this month, compared with respective estimates of 0.3% and 3.8%.
Much of the increase was due to rising accommodation costs. The category rose 0.5% for the month, accounting for more than half of the core CPI increase. On an annual basis, housing costs rose 6.2%, or about two-thirds of the increase in inflation.
Fed officials largely expect housing costs to decline over the year as renewed leases reflect lower rents.
Food prices rose 0.2% in December, the same as November, while energy rose 0.4% after falling 2.3% in November. Gasoline rose 0.2%.
In other key price indexes, car insurance rose 1.5%, medical care rose 0.6% and used car prices, which were a major contributor to the initial surge in inflation, rose another 0.5% after rising 1% in November .6% had increased.
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