ARLINGTON, Va.—On a seasonally-adjusted basis, overall consumer prices rose 0.4% in December, with the Bureau of Labor Statistics reporting the overall consumer price index (CPI) grew 1.3% over the 12-month period.
NAFCU Chief Economist and Vice President of Research Curt Long noted that most of the inflation was concentrated in fuel and apparel prices.
"Although prices are rising, the slack in the economy means the Federal Reserve is highly unlikely to raise rates in response," said Long. "Stimulus checks have reached most people, but much of that total will remain unspent until broader reopening occurs."
Energy prices rose 4% during the month, following a 0.1 decrease in November. From a year ago, energy prices were down 7.3%. Additionally, food prices climbed 0.4% in December and are up 3.9% compared to this time last year.
Long also highlighted that the "volatile" used car and truck index dropped 1.2% after a similar fall the previous month. Of note, new car prices rose 0.4%.
"NAFCU expects inflation to pick up later in the year, but that will not be enough to prompt a rate hike from the Fed," Long concluded.
Core prices (excluding food and energy costs) rose 0.2% compared to November. Year-over-year core CPI growth was 1.6%.