Inflation remained unchanged in December, according to a federal report released Tuesday.
Core inflation, which measures inflation without the influence of volatile food and gas prices, also remained unchanged in December at 2.6 percent. While inflation remained steady and was lower than expected, prices in key grocery categories stayed high.
“Over the past year, prices rose across key essentials, including groceries such as beef, bananas, and bread, housing costs like rent and electricity, and other necessities, including infant and toddler clothes,” progressive economic think tank Groundwork Collaborative wrote in response to the report. “These large price increases continue to hit items families rely on most.”
This past month’s stagnant numbers will likely be a thorn in the side of President Donald Trump, who has insisted that consumers’ everyday life is cheaper and recently claimed his administration has “done a great job on the word affordability.” The administration has made efforts to lower consumer costs through proposals such as buying billions in mortgage bonds to lower home loan rates, and ease credit card costs by implementing a one-year 10 percent rate cap.
While the overall inflation rate remained the same, costs in key food categories such as coffee, flour, and bread remained elevated year-on-year:
- Uncooked ground beef: +15.5 percent
- Frozen fish and seafood: +8.6 percent
- Coffee (roasted and instant): +18.7 percent
- Flour: +2.4 percent
- Bread: +2.2 percent
- Rice: +0.8 percent.
Eggs, which have been a flashpoint for inflation discussions, continued their price decline, falling 20.9 percent in December.
Other notable cost decreases included propane, kerosene, and firewood (-5.9 percent), car and truck rentals (-4.1 percent), and potatoes (-3.4 percent).
Tuesday’s inflation report provides more data for the Federal Reserve to make interest rate decisions when it meets later this month. However, today’s report may not have a big impact on the Fed’s rate decision, said David Russell, global head of market strategy at TradeStation Group.
“Today’s data probably won’t have much influence on Fed policy given the coming change in leadership,” Russell told The Independent by email. “But, it keeps expectations on track for lower rates and likely supports risk appetite.”
That being said, the Fed has faced continued pressure from President Donald Trump to lower rates. Trump’s persistence has made some experts concerned about the administration’s interference in the Fed’s independence, which includes a Department of Justice criminal investigation of the Federal Reserve. Additionally, within hours of the inflation report, Trump took to Truth Social to applaud the “low” inflation figures and push Powell to cut rates.
Stock prices rose after the inflation report, with the Dow eclipsing 47,000.