U.S. consumer prices rose 2.7% in December 2025 compared to the same month a year earlier, according to the latest Consumer Price Index (CPI) data released by the Bureau of Labor Statistics on Tuesday, January 13, 2026.
The figure marks a slight cooling from November’s 2.8% year-over-year increase and represents the lowest annual inflation reading since early 2021. Core inflation (excluding food and energy) also moderated to 3.2% from 3.3% in November.
The subdued close to 2025 comes amid persistent efforts by the Federal Reserve to bring inflation back toward its 2% target following the post-pandemic surge. Annual inflation for the full year 2025 averaged 2.9%, down from 4.1% in 2024.
Key drivers of the December reading:
Food: Prices rose 0.3% month-over-month, led by increases in eggs and dairy.
Energy: Gasoline prices fell 2.1% in December, helping to offset other gains.
Shelter: The largest contributor to inflation, shelter costs rose 0.4% monthly and remain up 5.1% year-over-year.
Used vehicles and airline fares showed notable declines.
Month-on-month, the CPI rose just 0.2% in December, below economists’ expectations of 0.3%.
Subscribe To The Best Team In Conservative, Business, Technology, Lifestyle And Digital News Realtime! support@ddnewsonline.com
The data is likely to reinforce market expectations that the Federal Reserve will maintain a cautious approach to rate cuts in 2026. Fed Chair Jerome Powell has repeatedly emphasized the need for sustained progress toward 2% inflation before considering further easing.
Markets reacted mildly, with U.S. stock futures little changed and Treasury yields steady in early trading.
This marks the final CPI report of 2025, capping a year in which inflation moderated significantly from its 2022 peak of 9.1%.
By Ogungbayi Beedee Adeyemi
Send tips to: adeyemi@ddnewsonline.com | 08168555497