Inflation Rose in December 2024 As Expected

The U.S. Bureau of Labor Statistics reported that the consumer price index (CPI) rose 2.9% year over year in December 2024, up from 2.7% in November. This figure matched economist expectations and was likely impacted by seasonal factors, including gas, food and vehicle prices.

The “core” CPI, which strips out the unpredictable food and energy components, rose 3.2% in December. This figure was stuck at 3.3% for the previous four months, so this metric is finally easing. Core CPI remained stubborn due to high shelter costs. Other impactful services included motor vehicle insurance and medical care.

While December’s CPI reading was received as encouraging, the news was less positive for workers, as wages aren’t keeping up with inflation. The real average hourly earnings decreased 0.2% from November to December, increasing 1% from a year ago. The real average weekly earnings decreased 0.1%.

What’s Next?

Although inflation has been slowing, it’s still above the Federal Reserve’s 2% target. Economists aren’t expecting rate cuts in the first half of this year. Furthermore, the latest cooling inflation reading doesn’t mean immediate cost savings for most consumers.

Inflation continues to apply financial pressures on Americans, and economic uncertainty remains with President Donald Trump’s return to the White House. Individuals should continue to monitor the economy and associated inflation trends, adjusting their financial habits accordingly. Employees should check with their managers for financial and mental wellness benefits and related resources.

We will keep you updated with any notable changes.

Article Published By: Zywave, Inc