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A key inflation gauge accelerated in December to the fastest pace in nearly a year, showing how prices are still rising more quickly than most Americans would prefer—and faster than the Federal Reserve’s target of 2% a year.
Prices rose 0.4% in December from the previous month, up from 0.2% in November, the Commerce Department said Friday in a report that was delayed by the six-week government shutdown last fall. The monthly increase was the highest since last February. Compared with a year ago, inflation rose 2.9% in December, up from 2.8% in November. That is the largest yearly increase since March 2024.
Core prices—which exclude the volatile food and energy categories—also rose 0.4% in December from the previous month, up from 0.2% in November. That is also the highest since last February. Core prices jumped 3% in December from a year ago, faster than November’s 2.8% increase.
The figures show that inflation remains elevated, though it’s down from a peak of near 7% in 2022. With many prices still rising more quickly than they did before the pandemic, the report points to a key reason that many Americans remain unhappy with the economy, even as unemployment remains low and growth is solid.
