Inflation looked stable in December, but a closer look at the CPI revealed that several everyday costs continued to rise fast enough to keep household budgets under pressure — particularly housing, food and utilities.
The Consumer Price Index rose 2.7% year over year in December, unchanged from November and in line with estimates, according to the Bureau of Labor Statistics.
Prices increased 0.3% month over month, also in line with expectations. Core CPI, which excludes food and energy, rose 2.6% year over year and 0.2% over the month, coming in slightly below forecasts.
Zoom in, though, and several household categories are still running hot enough to keep consumer budgets tight.
December Inflation Report: Biggest Increases In The Table
While most inflation categories moved modestly, a few individual items posted outsized gains in December that stood out inside an otherwise unremarkable report.
One of the largest single-item increases came from subscription and rental of video and video games, which surged nearly 20% in a single month — the biggest monthly jump anywhere in the CPI basket.
Food prices also delivered some sharp surprises. Food costs rose 0.7% in December, and the increase was broad-based. Grocery prices climbed 0.7%, while food away from home also rose 0.7%.
On a year-over-year basis, food prices are up 3.1%, with groceries higher by 2.4% and restaurant prices up 4.1%. Full-service meals remain a particular pain point, rising nearly 5% over the past year.
Looking at single items, oranges, including tangerines, jumped 5.5% in December, while pork chops rose 5.0% over the month.
Even smaller grocery staples showed pressure, with peanut butter climbing more than 4% and fresh biscuits, rolls and muffins rising 2.0%.
On a year-over-year basis, beef and veal prices are up 16.4%, with some cuts climbing even faster, including uncooked beef steaks, which are up 17.8%. Some of the most noticeable annual inflation rates remains tied to everyday habits. Coffee prices are up nearly 20% from a year ago, with roasted coffee up 18.7% and instant coffee surging 28.0%.
Utilities were another quiet trouble spot last month. Utility gas service surged 4.4% in December, continuing a trend that has pushed the category up more than 10% over the past year — a meaningful hit for households as winter heating demand increases.
Travel-related costs also flared up. Airline fares jumped 5.2% in December, reversing prior softness and reminding consumers how quickly prices can reaccelerate around peak travel periods.
Where Consumers Finally Saw A Meaningful Relief
Some categories delivered sharp monthly declines in December, offering pockets of relief beneath the steady CPI headline.
Moving, storage and freight expenses posted the largest monthly drop, falling 14.3%, and are now down 17.0% from a year ago.
Egg prices fell another 8.2% in December, extending their slide to down 20.9% year over year and marking the biggest annual decline among major food items.
Price cuts also showed up in big-ticket household goods. Other appliances dropped 5.2% on the month, major appliances fell 4.3%, and laundry equipment declined 4.1%, reflecting continued easing in durable-goods inflation.
Service categories offered some relief as well. Tax preparation and accounting fees fell 4.5% in December, while motor vehicle insurance declined 3.7% and checking and other bank services dropped 3.5% over the month.
Fuel-related costs moved lower too, with other motor fuels down 3.5% in December, adding to the broader cooling in energy prices.
Used cars and trucks also continued to cool, declining 1.1% over the month. Additional declines showed up in communication services and household furnishings and operations, both of which fell in December.
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