US consumer prices rose 2.7% in December from a year earlier, according to the Labor Department’s Jan. 13 Consumer Price Index report.

The final CPI print of 2025 followed a year in which inflation eased unevenly across categories.

Headline inflation and monthly move

From November to December, consumer prices increased 0.3%.

Shelter and food led the monthly gains, rising 0.4% and 0.7%, respectively.

Energy prices increased 0.3% in December.

Over the last 12 months, the energy index rose 2.3% and the food index rose 3.1%.

Core inflation and gasoline

Core inflation, which excludes food and energy, rose 2.6% over the last 12 months, unchanged from the prior month.

Gasoline prices fell 0.5% in December and were down 3.4% over the year.

AAA data cited in the report showed regular unleaded at $2.82 per gallon on Jan. 13, down from $2.92 last month and $3.07 last year.

Economists cite shutdown distortions

Oxford Economics Chief U.S. Economist Michael Pearce wrote in a Jan. 13 note:

“Distortions caused by the government shutdown have made the inflation data harder to interpret, but the recent run of figures suggests inflation has peaked.”

Fed decision in late January

The CPI report lands ahead of the Federal Reserve’s two-day meeting at the end of January, with inflation still above the Fed’s 2% target.

CME FedWatch expectations cited in the report indicated forecasters broadly anticipate the FOMC will hold its target rate range at 3.5% to 3.75% after three consecutive cuts late last year.

The meeting will also be the first since reports that the Department of Justice is investigating Fed Chair Jerome Powell, raising questions about central bank independence.