Inflation rose more quickly than expected in December

A key inflation gauge accelerated in December, a sign that many 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. Compared with a year ago, inflation rose 2.9% in December, up from 2.8% in November.

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. Core prices jumped 3% in December from a year ago, faster than November’s 2.8% increase.

The figures show that inflation remains elevated, even as it has come down from a peak 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.

Friday’s report also showed that consumers kept spending at a solid clip in December, when spending rose 0.4% from the previous month, the same as in November.