US consumer inflation jumps more than expected to 3.4%

Consumer inflation in the United States rose more than anticipated in December, government data showed Thursday (Jan 11), underscoring the bumpy road to cooling price increases as the presidential election looms.

Consumer inflation in the United States rose more than anticipated in December, government data showed Thursday (Jan 11), underscoring the bumpy road to cooling price increases as the presidential election looms.

The Department of Labor's consumer price index (CPI), a key measure of inflation, was up 3.4 per cent from a year ago and higher than November's figure.

But underlying pressures still appear to be ebbing, as a "core" metric that strips out volatile food and energy prices cooled to 3.9 per cent in the last month of 2023.

While analysts do not expect Federal Reserve officials to base their rate-setting off of one month's data, accelerating inflation could add pressure on the central bank.

A rising inflation figure also complicates the picture for President Joe Biden, who heads into his reelection campaign facing persistent negative perceptions about the economy.

US policymakers rapidly lifted interest rates beginning in early 2022 and have held them at a high level, seeking to ease demand and sustainably lower inflation.

The aim is to ease demand by making it more appealing to save rather than spend.