Inflation Remains Above Target in December

Data released Tuesday by the Bureau of Labor Statistics showed inflation holding at a 2.7 percent annual rate in December, reflecting a continued rise in housing and food costs. 

Food costs rose sharply in December, climbing 0.7 percent on the month and 3.1 percent from a year earlier. Grocery prices were up 2.4 percent annually, while the price for dining-out rose 4.1 percent over the past year. Core inflation, which does not take into account food and energy, rose 0.2 percent in December to a 2.6 percent annual rate. The Federal Reserve hopes to keep inflation below 2 percent.

Bureau of Labor Statistics data show that core goods prices continue to run higher than in pre-pandemic periods, when deflation in that category was more common. The Trump administration has argued that prices are now declining and has attributed persistent inflation to policies enacted under the Biden administration.

Recent polling suggests that public frustration over high prices is increasingly landing on the Trump administration. A December POLITICO poll found that 46 percent of Americans now say affordability problems are Trump’s responsibility, including more than a third of his 2024 voters, signaling cracks in the coalition that returned him to office.

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