Here's the inflation breakdown for December 2024 — in one chart
Inflation ticked up in December on the back of higher energy and food prices, the Bureau of Labor Statistics reported Wednesday.
The bureau's consumer price index, an inflation gauge, rose 2.9% during the month versus the prior year.
That's up from a 2.7% annual inflation rate in November, and up from a recent low of 2.4% in September.
While the upward move may seem disheartening, evidence suggests inflation should resume its downward drift in 2025, economists said.
But they caution that President-elect Donald Trump's incoming administration could stall or reverse that progress if it pursues policies such as tariffs and tax cuts, which, depending on their scope, may be inflationary.
«The key wildcard here is policy,» Joe Seydl, a senior markets economist at J.P. Morgan Private Bank, said of inflation's trajectory.
The consumer price index, or CPI, measures how quickly prices rise or fall for a basket of goods and services, from haircuts to coffee, clothing and concert tickets.
CPI inflation has declined significantly from its pandemic-era high of 9.1% in June 2022. However, it remains above the Federal Reserve's target. The central bank aims for a 2% annual rate over the long term.
The Fed also uses anotherinflation measure, the personal consumption expenditures price index. CPI readings tend to run about 0.2 to 0.3 percentage points higher, Seydl said.
«We're not that far away,» Seydl said. «By the end of this year, we'd expect the year-over-year rates to be back in those targets.»
There were some trouble spots in December.
For example, grocery prices increased by 0.3% from November to December, according to CPI data. A rise of about 0.2% a month is consistent with hitting the Fed's target, economists said.
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