Consumer price data for December showed slower-than-expected core inflation, with declines in gasoline and key imported goods indicating tariff-related price pressures have largely faded.
By yourNEWS Media Newsroom
U.S. consumer prices rose at a slower pace than many economists anticipated in December, reinforcing signs that inflation remains contained and that tariffs have not translated into broad-based price increases for consumers.
The consumer price index increased 2.7 percent in 2025, matching expectations and unchanged from the prior 12-month reading. Core CPI, which excludes food and energy, rose 2.6 percent over the year, also unchanged from the previous month and below forecasts. On a monthly basis, headline prices increased 0.3 percent, while core prices rose 0.2 percent.
The December figures follow similarly subdued inflation data in November, which some analysts initially attributed to distortions linked to the federal government shutdown. The latest report suggests the earlier reading was not an anomaly. Price declines and muted inflation in categories most exposed to tariffs indicate that pass-through effects have been far smaller and shorter-lived than critics of tariff policy had projected.
“Many observers thought the downside surprise in November’s CPI was all fluke – but December’s tepid report shows it was less of a fluke and more of a signal,” analysts at Bloomberg Economics wrote after the data release. “While a big part of December’s downside surprise was related to used cars, many of the items exposed to tariffs saw price cuts, continuing what’s now a multi-month trend.” The analysts added that, based on their tracking of online prices, tariff pass-through likely peaked in October, according to their analysis published Tuesday in a live update following the CPI release on Bloomberg.
Core goods prices, a category that excludes food and energy and is often cited as most vulnerable to tariff pressures, were flat in December and up just 1.4 percent from a year earlier, a result that came in well below expectations. New vehicle prices were unchanged for the month and rose only 0.3 percent year over year. Used vehicle prices declined 1.1 percent in December and were up 1.6 percent from a year earlier.
Appliance prices fell 4.3 percent in December after seasonal adjustment and were down 1.7 percent compared with a year ago, defying expectations that this heavily imported category would see sustained tariff-driven increases. Furniture prices declined 0.4 percent for the month, moderating the annual increase to 3.6 percent after earlier gains that some analysts had linked to tariffs.
Apparel prices rose 0.6 percent in December after seasonal adjustment, though unadjusted prices declined 1.3 percent. Clothing prices were up 0.6 percent from a year earlier.
Energy prices continued to weigh on overall inflation. Gasoline prices fell 0.5 percent in December on a seasonally adjusted basis and were down 3.4 percent from a year earlier. Before seasonal adjustments, gasoline prices declined 5.3 percent for the month.
Shelter costs remained a key source of upward pressure. The shelter index increased 0.4 percent in December, with both rent and homeowners’ equivalent rent rising 0.3 percent. Lodging prices, which include hotels and motels, were up 2.9 percent over the year.
Food prices showed continued monthly volatility. The index for food at home rose 0.7 percent in December, though grocery prices were up a more modest 2.4 percent compared with a year earlier.
Taken together, the December data point to easing inflation momentum across a broad range of goods, particularly those once expected to reflect tariff-related cost increases, while housing and food continue to account for much of the remaining price pressure.
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