Stripping out food and energy costs, which tend to be more volatile even in non-pandemic times, inflation rose to 5.5% between December 2020 and December 2021 — the biggest annual jump since February 1991. That was a much faster pace than in November, when core inflation stood at 4.9%.
Separately, the food price index climbed 6.3%, while grocery prices rose even more: 6.5% last year. The energy cost index rose 29.3% over the past year.
For the month of December alone, prices rose 0.5%, adjusted for seasonal swings. It was slightly more than economists had forecast but a decrease from the 0.8% monthly increase in November.
What got more expensive?
Price trackers for housing as well as used cars and trucks were the biggest contributors to the December price hikes.
Food costs also went up — rising 0.5% — but at a slightly slower pace than in recent months. Prices rose in nearly all major grocery categories, with fruit and vegetable prices rising the most.
Energy costs declined by 0.4%, marking the first monthly decline since April 2021. But the decrease is unlikely to last into 2022.
“Unfortunately, energy prices have rebounded into January after a temporary Omicron-hit in December,” said Action Economics chief economist Mike Englund. He also expects that 12-month inflation data will continue to trend higher until at least February, data for which will be released in March.
This is a developing story. It will be updated