Here's the Breakdown for December CPI, in One Chart

In One Chart joined discussion · Jan 15 22:05

The US annual inflation rate climbed for the third consecutive month, reaching 2.9% in December 2024, up from 2.7% in November, aligning with market forecasts.

Here's the Breakdown for December CPI, in One Chart

The rise at the year's end was partially attributed to low base effects from the previous year, especially in the energy sector. Energy prices decreased slightly less (-0.5% compared to -3.2% in November), primarily influenced by changes in gasoline (-3.4% vs -8.1%), fuel oil (-13.1% vs -19.5%), and natural gas prices (4.9% vs 1.8%).

Additionally, inflation rates increased for food (2.5% vs 2.4%) and transportation (7.3% vs 7.1%), while the decline in new vehicle prices slowed (-0.4% vs -0.7%).

Conversely, inflation for housing costs moderated (4.6% vs 4.7%), and used cars and trucks continued to see price drops (-3.3% vs -3.4%).

On a monthly basis, the Consumer Price Index surged by 0.4%, the largest increase since March and higher than the anticipated 0.3%. The energy index alone rose by 2.6%, contributing to over 40% of the monthly rise, primarily due to a 4.4% increase in gasoline prices. Food prices also saw a modest increase of 0.3%, and shelter costs edged up by the same margin.

Investors still expect a low probability of a rate cut in January. However, interest rate futures traders increased their bets on the Federal Reserve's interest rate cut in June, and the probability of a second Fed rate cut in 2025 rose to about 50%.

The Nasdaq and S&P 500 rose sharply before the market opened.

Also Read: Here's the Breakdown for November CPI, in One Chart

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