CPI Report: Annual Inflation Rate Comes In At 2.7% In December, In Line With Expectations

• Core CPI, which excludes food and energy, showed a 0.2% increase in December, matching the rise in November.
• On an annual basis, core CPI stood at 2.6%, compared to Wall Street estimates of 2.7%.
• Recreation costs rose 1.2% in December, and according to the BLS, this was the largest monthly increase in the index’s history, which began in 1993.

U.S. consumer prices rose in line with expectations in December, according to the Consumer Price Index (CPI) report released on Tuesday.

According to data from the Bureau of Labor Statistics (BLS), on a seasonally adjusted basis, CPI rose 0.3% in December, after rising 0.2% in November.

This puts the annual rate at 2.7% before the seasonal adjustment.

Core CPI, which excludes food and energy, showed a 0.2% increase in December, matching the rise in November. This was lower than a Dow Jones estimate, according to MarketWatch data.

On an annual basis, core CPI stood at 2.6%, compared to Wall Street estimates of 2.7%. The headline and core inflation are still above the Federal Reserve’s long-term target of 2%.

Shelter Costs Rise

Shelter costs bounced back in December, rising 0.4% in the month. The BLS report stated that this was the largest factor for the gain in the all items monthly increase.

The food index increased 0.7% over the month as did the food at home index and the food away from home index. The index for energy rose 0.3% in December.

Recreation Costs, Airfares Jump

Recreation costs rose 1.2% in December, and according to the BLS, this was the largest monthly increase in the index’s history, which began in 1993.

Likewise, airfares also surged during the month, with its index rising 5.2% in December. 

The indexes for communication, used cars and trucks, and household furnishings and operations were among the major indexes that decreased in December.

Meanwhile, U.S. equities declined in Tuesday’s opening trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down by 0.25%, the Invesco QQQ Trust ETF (QQQ) fell 0.15%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) declined 0.63%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘neutral’ territory.

The iShares 7-10 Year Treasury Bond ETF (IEF) was up 0.13% at the time of writing.

Also See: ATON Stock More Than Doubles Pre-Market After Company Adds 576 Nvidia B300 Chips To Its Arsenal: Retail Sentiment Soars

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