Inflation ticked up across the US last month, according to the last report on consumer prices under the Biden administration.
Donald Trump has promised to bring prices down for millions of Americans. But while price rises have slowed sharply since their post-pandemic peak of 9.1%, the pace of inflation remains higher than the Federal Reserve’s target rate of 2% per annum.
The consumer price index (CPI) rose at an annual rate of 2.9% in December, up from 2.7% the previous month, and in line with expectations, according to official data. On a month-to-month basis, the index rose 0.4%.
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The closely watched “core” index, which strips out volatile food and energy prices, rose 3.2% in December – down slightly from its annual rate of 3.3% in November.
Related: Fed fears Trump policies could hinder effort to cut US inflation, minutes show
On the campaign trail, the incoming president pledged repeatedly to bring down the prices of goods, including groceries, which have been risen significantly in recent years. Since winning the election, however, he has acknowledged that doing so will be very hard.
The latest CPI reading, released days before the Biden administration hands over to Trump and his officials, underlines just how hard it will be for them to make good on pledges to ease the cost of living.
Prices are not only still rising; they increased at a higher rate in December than they did in November, and inflation remains above the 2% level targeted by policymakers at the Federal Reserve.
Before Wednesday’s report, Samuel Tombs, chief US economist at Pantheon Macroeconomics, noted that strong holiday demand had boosted prices for fuel, air transportation and accommodation. “People’s inflation expectations – which have increased recently, according to the Michigan survey – are more responsive to changes in prices for gas and food, which are purchased frequently, than prices for other items,” he said.
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