Summary
In December, a key measure of U.S. inflation increased to its highest rate in nearly a year, rising 0.4% from the previous month and 2.9% from a year earlier. The Federal Reserve's preferred gauge, known as the PCE price index, showed higher inflation rates compared to the consumer price index due to different weightings of certain goods. The Federal Reserve chose not to change its interest rate in late January, despite calls for a reduction.
Key Facts
- Inflation increased by 0.4% in December compared to November.
- Inflation rose by 2.9% in December compared to the previous year.
- Core prices, which exclude food and energy, also increased by 0.4% in December.
- Core prices were 3% higher than the previous year.
- The personal consumption expenditures (PCE) price index is preferred by the Federal Reserve for measuring inflation.
- The Federal Reserve kept interest rates unchanged at around 3.6% in January.
- Consumer spending rose by 0.4% in both November and December.
- Prices for furniture, clothing, and groceries increased, while gas prices fell.
