Inflation rate grows to 3.4% in December 2023: High housing costs and rent are to blame
Inflation climbed from 3.1% to 3.4% in December, a sign the Federal Reserve will continue to have to wrestle consumer price growth down to its desired 2% level.
Inflation climbed from 3.1% to 3.4% in December, a sign the Federal Reserve will continue to have to wrestle consumer price growth down to its desired 2% level.
Forecasts had been for a reading of 3.2%.
On a monthly basis, inflation hit 0.3%, while core inflation, which strips away the more volatile costs of food and energy, was 3.9%, down from 4% in November but ahead of forecasts for a reading of 3.8%.
The biggest contributors to December's pickup in price growth were housing and shelter costs, which the Bureau of Labor Statistics said accounted for more than half of the gain. On a year over year basis, total shelter costs increased 6.2%, while rents increased 6.5%.
"As long as shelter inflation remains stubbornly elevated, the Fed will keep pushing back at the idea of imminent rate cuts," said Seema Shah, chief global strategist at Principal Asset Management, in a note to clients following the Thursday data release.
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