US inflation climbs faster than expected in December

New York: Inflation in the US rose more than expected in December thanks to a jump in energy and housing costs, underscoring the challenge of taming price pressures within the economy, reports said.

The Labor Department said on Thursday that the consumer price index, a broad measure of the price of everyday goods including gasoline, groceries and rent, rose 0.3 per cent in December from the previous month, more than expected. Fox Business reported.

Prices climbed 3.4 per cent from the same time last year, coming in above both the expectation from Refinitiv economists and the 3.1 per cent gain recorded in November, it added.

Other parts of the report indicated that inflation is continuing to retreat, albeit slowly.

Core prices, which exclude the more volatile measurements of food and energy, climbed 0.3 per cent, or 3.9 per cent annually. Both of those figures are slightly higher than estimates; however, it marked the first time since May 2021 that core inflation fell below 4 per cent.

Altogether, the report painted a picture of extremely stubborn inflation that has been slow to retreat, even as the Federal Reserve hiked interest rates to the highest level in two decades.

The report indicates that while inflation has fallen considerably from a peak of 9.1 per cent, it remains well above the Federal Reserve's 2 per cent target, Fox Business reported.

"Today’s inflation report reinforces the notion that the market had gotten a little overexcited around the timing of rate cuts," said Seema Shah, chief global strategist at Principal Asset Management. "These are not bad numbers, but they do show that disinflation progress is still slow and unlikely to be a straight line down to 2 per cent."