ARLINGTON, Va.—On a seasonally adjusted basis, overall consumer prices increased 0.2% in December following a 0.3% rise in November.
NAFCU's Curt Long attributed the growth mainly to increased energy, medical care, and shelter prices.
"Energy is up 3.5% to its year-ago level, and has continued a rise for two consecutive months," said Long, NAFCU's chief economist and vice president of research. "Used car prices fell 0.8% in December, but this could be partly due to a new methodology for calculating the index.
“The Federal Reserve’s preferred measure of inflation grew by just 1.6% for the 12 months through November, well below the FOMC’s 2% target. That accounts for the broad agreement to hold off on rate hikes until clear signs emerge of above-target inflation," he concluded.
Federal Reserve Set to Meet
The FOMC is set to hold its first meeting of 2020 Jan. 28-29. The committee cut rates three times last year before holding the target rate range at 1.5% to 1.75% at the conclusion of its December meeting.
The Bureau of Labor Statistics reported that the overall consumer price index (CPI) grew 2.3% over the 12-month period. Core prices (excluding food and energy costs) increased 0.1% in December compared to the previous month. Year-over-year core CPI growth was 2.2%.
Energy prices also rose in December, increasing 1.4%. Food growth was up 1.8% on a year-over-year basis after rising 0.2% in December, Long noted.