WASHINGTON, Jan. 13, 2026 — U.S. consumer prices rose in December, driven by higher costs for rents and food, as distortions caused by the government shutdown that had artificially lowered inflation in November faded. The Consumer Price Index increased 0.3 percent last month, while the annual inflation rate remained at 2.7 percent, matching the gain in November and meeting economists’ expectations. Analysts said the December report provided a more accurate view of price trends after disruptions in data collection during the shutdown.

Inflation Data Normalizes After Shutdown

Effects on Shelter and Food: The 43-day federal government shutdown in October and November had prevented the Labor Department from collecting prices for October. To compile the November index, the Bureau of Labor Statistics carried forward earlier data, particularly for rents and housing, which likely understated inflation. Once data collection resumed in December, the report showed a 0.4 percent rise in shelter costs, making housing the main driver of the CPI increase. Food prices also surged 0.7 percent, with higher costs for fruits, vegetables, dairy, beef, and steaks contributing to the monthly gain. The December figures gave a clearer picture of how everyday expenses were changing for American households.

Core Inflation and Monthly Gains: Excluding volatile food and energy prices, core inflation rose 0.2 percent for the month and 2.6 percent year over year, remaining largely in line with recent trends. Energy prices climbed 0.3 percent, as a 4.4 percent rise in natural gas offset slight declines in gasoline and a minor drop in electricity. Analysts noted that the numbers reflected moderate underlying inflation pressures and that earlier distortions from the shutdown had masked the true pace of price increases. This more complete dataset allowed economists to better gauge underlying inflation trends.

Household Costs and Prices

While overall inflation held steady, consumers continued to face higher costs in everyday categories. Shelter and food were significant contributors to the monthly increase, and restaurant prices rose 0.7 percent. Coffee prices climbed 1.9 percent, while egg prices fell 8.2 percent. Despite these increases, overall inflation remained far below the peaks seen in 2022, providing some relief to households and policymakers even as Americans continued to feel the impact of higher prices for essentials.

Federal Reserve Outlook

The December inflation report is expected to inform the Federal Reserve’s policy decisions in the coming months. With headline and core inflation largely matching expectations and wage growth showing signs of moderation, most analysts anticipate that the central bank will maintain its benchmark interest rate in the 3.50 to 3.75 percent range. The more representative December data provides a clearer baseline for assessing whether previous rate hikes have effectively moderated inflation.

Political and Economic Implications

Rising prices for food and rents remain politically sensitive as households cope with higher living costs. Policymakers face scrutiny over affordability issues, and ongoing supply chain disruptions, tariffs, and energy costs could continue to influence inflation in specific sectors. The December report underscores that while inflation is no longer accelerating sharply, it has not declined dramatically, leaving the broader economic picture mixed.