December Inflation Holds at 2.7% as Cheaper Gasoline Offsets Food Costs

Consumer prices rose 2.7 percent in December from a year earlier, a slight uptick, as lower gasoline prices offset higher food and housing costs, the Bureau of Labor Statistics reported Tuesday, Jan. 13. NBC News and CNBC both reported the annual figure, and CNBC said prices rose 0.3 percent from November, matching the Dow Jones consensus forecast.

Core prices, which exclude food and energy, rose 0.2 percent in the month and 2.6 percent over the year, each 0.1 percentage point below expectations, according to CNBC. Federal Reserve officials generally treat core inflation as the better guide to underlying trends.

Gasoline fell 0.5 percent in December from November, which held down the overall index, NBC News and CNBC reported. Food prices went the other way: grocery prices jumped 0.7 percent for the month, with egg prices down 8.2 percent after earlier surges, according to both outlets, while beef prices rose, NBC said. Shelter rose 0.4 percent and was the largest contributor to the monthly increase, CNBC reported. NBC added that the previous report had counted housing as zero because shutdown-related gaps forced many figures to be estimated.

CNBC said recreation prices rose 1.2 percent, the largest one-month gain in BLS data going back to 1993, while household furnishings fell 0.5 percent and used cars and trucks fell 1.1 percent. Real average wages were flat in the month and up 1.1 percent from a year earlier, CNBC reported, citing a separate BLS release.

The report arrived with unusual context. NBC News said the government shutdown that ran from early October to mid-November 2025, the longest in U.S. history, suspended data collection and could keep distorting economic statistics in coming months. CNBC described the release as bringing the agency current on inflation and employment data.

The Federal Reserve cut interest rates three times in late 2025 and is widely expected to hold at its meeting at the end of this month. CNBC cited the CME Group’s FedWatch gauge, which showed traders expecting no cut before June. Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, told CNBC, “We’ve seen this movie before — inflation isn’t reheating, but it remains above target,” adding that the report does not give the Fed what it needs to cut rates this month. Joseph Brusuelas, chief economist at RSM, told NBC News that the window for a near-term cut is “rapidly closing.”

President Donald Trump seized on the numbers. He posted that they were “Great (LOW!) Inflation numbers” and that Fed Chair Jerome Powell should cut rates “MEANINGFULLY,” CNBC reported; NBC said he also called Powell “Too Late.” The exchange comes as the Justice Department has opened an investigation into the Fed over a building renovation involving Powell, which Powell has called an effort at “intimidation,” NBC reported.

Both outlets noted the political backdrop of an election year. NBC said affordability has become a central concern for the administration, which has pressed oil companies to invest in Venezuelan oil to lower gas prices, ordered $200 billion in mortgage bond purchases to reduce home loan rates, and called for a one-year cap of 10 percent on credit card interest. Inflation has come down sharply from its peak but remains above the Fed’s 2 percent target.