Report: U.S. inflation picks up, though some prices rise only slightly
WASHINGTON — Higher energy and housing prices boosted overall U.S. inflation in December, a sign that the Federal Reserve’s drive to slow inflation to its 2% target will likely remain a bumpy one.
Thursday’s report from the Labor Department showed that overall prices rose 0.3% from November and 3.4% from 12 months earlier. Those gains exceeded the previous 0.1% monthly rise and the 3.1% annual inflation in November and were slightly above economists’ forecasts.
More than half the increase in prices from November to December reflected higher housing costs. Energy costs, along with food prices, also contributed to inflation.
Excluding volatile food and energy costs, though, so-called core prices rose just 0.3% month over month, unchanged from November’s increase. Core prices were up 3.9% from a year earlier — the mildest such pace since May 2021. Economists pay particular attention to core prices because, by excluding costs that typically jump around from month to month, they’re seen as a better guide to the likely path of inflation.
Inflation has cooled more or less steadily since hitting 9.1% in mid-2022. Still, despite the slowdown in price increases, along with steady economic growth, low unemployment and healthy hiring, polls show many Americans are dissatisfied with the economy
Much of the public remains exasperated by higher prices. Prices are still 17% higher than they were before the inflation surge began and are still rising.
Small-business owners are adjusting to higher costs. Roberto Torres, president of Blind Tiger Coffee Roasters in Tampa, Florida. Torres used to charge $3.50 for a 12-ounce latte; it now costs $5. To save money, he’s buying supplies in bulk — a year’s worth at a time.
And Scott Christian, owner of The Hochatown Saloon in Broken Bow, Oklahoma, has had to raise menu prices by 20% three or four times in the past two years