From NBCUniversal:

The annual inflation rate in the U.S. rose to 3.4% in December 2023, reversing a two-month downward trend. However, economists believe it is not cause for concern as it represents progress in the inflation fight and reflects positive movement in real earnings and overall CPI. The index has declined by half since December 2022 and from the pandemic peak in June 2022.

Inflation rates may be misleading in the short term due to base effects and a relatively small monthly increase (0.1%) in prices from November 2022 to December 2022. Some categories saw notable increases, including shelter, motor vehicle insurance, and personal care, while others, particularly physical goods, saw prices level out or decline. Food and housing prices remain elevated but are moving in the right direction.

Shelter prices have risen 6.2% over the past year, accounting for over two-thirds of the CPI’s increase since December 2022. Other categories with notable increases include motor vehicle insurance, recreation, personal care, and education costs, while prices for physical goods have leveled out or declined. Food inflation has also moderated, and gasoline prices rose more slowly in December.

It is anticipated that marketplace rents for housing will fall in the coming months, influencing the Labor Department’s CPI calculations in a more positive direction. This suggests that staples like food, gas, and rent are moving toward more favorable pricing. Consumers may find relief in the fact that, while still elevated, prices for food and housing have stopped rising.



Read more: Here’s the inflation breakdown for December 2023 — in one chart