U.S. inflation increased by the most in eight months in December amid robust consumer spending on goods and services, suggesting the Federal Reserve would probably be in no hurry to resume cutting interest rates soon.
U.S. labor costs rose marginally in the fourth quarter, offering some comfort to Federal Reserve officials after progress lowering inflation stalled at the end of 2024.
The central bank needs to see further progress on inflation or weakness in the labor market to resume interest rate cuts.
Fresh tariffs amid high inflation are making the Fed’s job uniquely difficult and feeding uncertainty about what to expect for interest rates this year.
US inflation increased by the most in eight months in December amid a surge in consumer spending, suggesting the Federal Reserve would probably be in no hurry to resume cutting interest rates soon. Other data on Friday showed labor costs rose in the fourth quarter as wages edged up.
U.S. consumers grappling with soaring prices for beef and eggs will face even higher costs for meat, vegetables and fruit if President Donald Trump imposes tariffs on Canadian and Mexican imports, economists and food industry executives said.
Friday’s report from the Commerce Department showed that consumer prices rose 2.6% in December from a year earlier.
Gallup’s annual Economy and Personal Finance poll found that, in 2024, respondents named inflation as the most important financial problem they face today. And despite some optimism that the economy will soon improve, a 2025 Allianz Life study found that 60% of Americans believe inflation will get worse this year.
The Consumer Price Index report for January is expected to show broadly unchanged annual inflation according to nowcasts. That may be broadly good news for the Fed.
The Federal Reserve’s preferred inflation gauge moved even higher in December, driven largely by rising energy prices as well as food. However, a closely watched measurement of underlying inflation trends indicated some progress in the fight to rein in price hikes.
Let's take a trip back to 1925 – a time of rapid economic growth and technological innovations that brought many new consumer goods into the lives of Americans. "The Roaring Twenties symbolized a period of excess and consumerism,
An inflation gauge closely watched by the Federal Reserve rose slightly last month, the latest sign that some consumer prices remain stubbornly elevated, even as inflation is cooling in fits and starts.