US consumer inflation increased for the third consecutive month in December, driven by higher energy costs, according to government data released on Wednesday. This development adds pressure on the Federal Reserve to reconsider pausing rate cuts.
The consumer price index (CPI) climbed to 2.9% year-over-year in December, up from 2.7% in November, as reported by the Labor Department.
The figures aligned with the median estimates of economists surveyed by Dow Jones Newswires and The Wall Street Journal.
The US central bank has cut rates by 1% point since September, looking to bolster the labour market.
The recent rise in inflation reinforces expectations that the Federal Reserve will likely hold interest rates steady at its upcoming decision later this month.
However, the increase in prices could pose challenges for President-elect Donald Trump’s economic agenda as he prepares to assume office on Monday. Trump has proposed policies such as tariffs and deportations, which many economists warn could drive inflation higher.
Trump and his supporters have countered these concerns, arguing that his plans for deregulation and increased energy production are designed to help stabilize prices.
On a monthly basis, inflation rose by 0.4% in December, compared to 0.3% in November. Meanwhile, core inflation showed signs of easing.
According to the Labour Department, one of the biggest drivers of inflation in December was the energy index, which jumped by 2.6%, accounting for “over” 40% of the monthly increase.
Tired of missing hot stocks? Unicorn Signals provides powerful tools like stock scans and more help you make informed trading decisions. Download now and take control of your portfolio!