The US Bureau of Labor Statistics (BLS) is set to release the Consumer Price Index (CPI) report for December 2025, with economists forecasting a slight uptick in core inflation. The core CPI, which excludes volatile food and energy prices, is expected to rise 2.7% year-over-year, a minor increase from November's 2.6% reading, which was the slowest annual gain since early 2021.
Monthly projections indicate both headline and core CPI will increase by 0.3%, signaling a moderate but persistent rise in prices. This data comes after significant distortions in the November report, which were caused by data collection issues during a prolonged government shutdown. Analysts, including those from Bloomberg Economics, suggest the December figures may appear "hot" partly due to an unwinding of the downward bias seen in the previous month's data.
The inflation rate remains uncomfortably above the Federal Reserve's 2% target, reinforcing the central bank's cautious stance. Minutes from the Fed's December meeting revealed a deeply split committee, with the decision to hold rates being "finely balanced." Officials, including New York Fed President John Williams, are scheduled to speak publicly as they assess the trajectory of inflation and growth.
Concurrently, other economic data is in focus. Retail sales for November, excluding auto purchases, are forecast to rise 0.4%, indicating steady consumer demand. The broader economic picture, including labor market stabilization with slowing wage growth, supports the expectation that the Fed will maintain its current interest rate policy in the near term, awaiting clearer signals on inflation's path.
