The U.S. Bureau of Labor Statistics released its Consumer Price Index Summary, with more news of increasing prices. Prices were up in December and January, increasing the 12-month inflation rate to 3.0%. December saw prices increase 0.4%, up from 0.3 in November, while January saw a larger price hike at 0.5%. The Federal Reserve’s goal of 2.0% is quickly fading, meanwhile, price uncertainty looms amongst American consumers.
Energy and Fuel Costs Remain a Challenge
As can be seen from the above chart, prices of energy commodities (gasoline and oil) have been dancing around for the American consumer over the last several months. After seeing price drops in the summer months for gas and oil, prices spiked up in December. The year-to-year change remains positive, as prices were sky-high in 2022-2023. However, prices have been on the rise for both categories for the last two months.
Food Prices Continue to Climb
Even more important than gas prices are food prices. Grocery prices have been a concern for a while for American consumers, and there doesn’t seem to be any relief coming anytime soon. November and December saw prices increase 0.3%, while January saw a 0.4% price increase. The report states, “The meats, poultry, fish, and eggs index rose 6.1 percent over the last 12 months as the eggs index increased 53.0 percent.” Eggs have been a popular topic of discussion around the United States, as prices were seemingly skyrocketing, of course being confirmed by this report.
When Will Relief Come
The Federal Reserve has indicated it will pause interest rate cuts due to concerns of rising prices. The Fed’s goal of 2% will continue to drive economic policy, while President Trump has indicated interest rates need to come down faster than the Fed has indicated it would be willing to do. Prices have been a major concern for the American public for the last few years, and while inflation slowed at the beginning of 2023, prices started to kick back up at the later end of the year. 2025 is not off to a strong start, but a new administration looks to bring relief.
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