Energy and food prices led to higher inflation rates in December

Inflation rose In December to its highest level since July, most of the increase was driven by higher energy and food prices.

Issued by the Ministry of Labor Consumer Price Index (CPI) — a broad measure of how much everyday goods like gasoline, groceries and rent cost — for December, which showed prices were 2.9% higher than a year ago after a 0.4% increase from the previous month, larger than LSEG economists estimated. .

Much of the increase in prices is due to rising energy and food costs, which put pressure on household budgets.

More than 40% of the monthly CPI increase is attributable to higher energy prices, with the Bureau of Labor Statistics’ energy index rising 2.6% in December after energy prices showed little change in prior months and declined 0.5% year over year in the past. month.

Inflation rose 2.9% in December, in line with expectations

Energy prices They were flat in July, then recorded declines of 0.8% and 1.9% in August and September, respectively, before stabilizing in October. It rose 0.2% in November before rising 2.6% in December.

Gas prices They contributed significantly to the rise in the energy index, which rose by 4.4% in December. Similar to the broader energy index, gas prices fell 0.6% in August, 4.1% in September, and 0.9% in October before rising at the end of the year with a gain of 0.6% in November, before a larger increase last month. .

price Utility gas service It also rose in December by 2.4% from the previous month and by 4.9% on an annual basis.

It’s 2025, and breakfast prices continue to rise

Food prices It also recorded a notable increase in December, rising by 0.3% during the month. Bucking the trend in energy prices, food costs have recorded similarly modest increases in recent months.

Going back to June, the smallest monthly increases in food prices were 0.1% in June and July and 0.2% in October. Larger increases of 0.4% were recorded in September and November in the run-up to the December CPI report.

Natural gas prices rise amid expectations of a colder than expected winter

Within the Bureau of Labor Statistics’ Food Price Index, the cost of food outside the home has increased twice as much as the cost of food at home over the past year, with the former rising 3.6% in the past 12 months compared to 1.8% for the latter.

Eggs continued to experience significant price fluctuations among foodstuffs tracked by the Bureau of Labor Statistics, rising 3.2% in December to bring the 12-month rise to 36.8%. Egg supplies were disrupted by a bird flu outbreak last year.

the US Department of Agriculture “Supply remains the biggest challenge in the market as highly pathogenic avian influenza (HPAI) continues to impact commercial table egg flocks into the new year,” he noted in a report this month.

Get FOX Business on the go by clicking here

Beef prices also rose faster than overall food prices in December, both on a yearly and monthly basis. Beef and veal prices rose 0.5% in December from the previous month and 4.9% from a year ago.