CPI rose at 2.7% annual rate in December as inflation remains sticky
Summary
The Consumer Price Index (CPI) increased by 2.7% over the year ending in December 2025, matching expectations and the previous month’s rate. While overall inflation has cooled from earlier peaks, prices for essentials like food remain high, making it harder for many Americans to manage their budgets.Key Facts
- The annual inflation rate, measured by the CPI, was 2.7% in December 2025, unchanged from November.
- Core inflation, which excludes food and energy costs, rose by 2.6% over the same period.
- Food prices increased by 3.1% in December, with notable rises in ground beef (15.5%), coffee (19.8%), and bananas (5.9%).
- Egg prices decreased by 20.9% compared to a year ago.
- Inflation stayed below 3% for all of 2025, much lower than the 9.1% peak in mid-2022.
- Tariffs introduced during President Trump’s administration raised some prices but less than expected because some retailers absorbed the costs.
- The Federal Reserve lowered interest rates three times in late 2025 to address a weakening job market despite inflation still being above its 2% target.
- Experts expect inflation to remain above the Fed’s 2% goal in 2026 but possibly move closer to it if monetary policies continue unchanged.
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