Consumer Prices Remain Steady in December
In December, U.S. consumer prices were relatively stable, largely influenced by a significant decrease in gasoline prices and minimal inflation in crucial product categories that many had anticipated would be affected by tariffs.
The consumer price index for 2025 saw an increase of 2.7%, matching expectations and remaining unchanged from the previous month’s figure. The core CPI, which excludes energy and food prices, also rose 2.6%, aligning with the earlier month and performing better than projections.
Month-over-month, the overall price basket increased by 0.3%, while the core basket saw a rise of 0.2%.
Core goods prices, a metric that omits food and energy, remained flat for the month, showing a modest increase of just 1.4% from the same time last year—this was significantly better than anticipated. Prices for new cars held steady, with only a slight increase of 0.3% year-over-year. In contrast, used car prices experienced a decline of 1.1%, although they rose by 1.6% compared to last year.
In December, consumer electronics prices fell by 4.3%, even when taking holiday discounts into account. Year on year, these prices dropped by 1.7%, contrary to expectations that this heavily imported category would be pressured by tariffs. Meanwhile, home furnishings—an area that might typically see price increases due to tariffs—also fell by 0.4% in December, but still showed a year-on-year rise of 3.6%.
Clothing prices adjusted for holiday sales went up by 0.6%, while unadjusted figures showed a decline of 1.3%. Year-over-year, apparel prices also rose by only 0.6%.
The gasoline index decreased by 3.4% annually, reflecting a seasonally adjusted drop of 0.5 percentage points in December. Gas prices notably fell by 5.3% in December before seasonal adjustments.
On a different note, the shelter index increased by 0.4% in December, with the rent index and a metric for the implicit cost of homeownership both rising by 0.3%. The lodging index, which includes hotels and motels, climbed by 2.9% compared to the previous year.
Inflationary pressures continued to linger in grocery stores, where the index for dining at home rose by 0.7% in December, although this represented only a 2.4% increase compared to the same month last year.
