Inflation Accelerates More Than Expected in December

Key inflation gauge rose 0.4% from November, signaling prices are still rising faster than the Fed's 2% target.

Published on Mar. 1, 2026

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A key inflation gauge accelerated in December, rising 0.4% from the previous month, up from 0.2% in November. Compared to a year ago, inflation rose 2.9% in December, up from 2.8% in November. Core prices, which exclude volatile food and energy categories, also jumped 0.4% in December, faster than the 0.2% increase in November. The figures show inflation remains elevated, even as it has come down from a peak near 7% in 2022.

Why it matters

The higher-than-expected inflation rate is a sign that many prices are still rising more quickly than most Americans would prefer, which is a key reason many remain unhappy with the economy despite low unemployment and solid growth. The report points to the challenge the Federal Reserve faces in bringing inflation down to its 2% target.

The details

The Commerce Department reported that prices rose 0.4% in December from the previous month, up from 0.2% in November. Compared to a year ago, inflation rose 2.9% in December, up from 2.8% in November. Core prices, which exclude volatile food and energy categories, also jumped 0.4% in December, faster than the 0.2% increase in November. The figures show inflation remains elevated, even as it has come down from a peak near 7% in 2022.

  • Prices rose 0.4% in December from the previous month.
  • Compared to a year ago, inflation rose 2.9% in December, up from 2.8% in November.

The players

Federal Reserve

The central banking system of the United States that is responsible for monetary policy, including setting interest rates to control inflation.

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The takeaway

The higher-than-expected inflation rate signals that the Federal Reserve still has work to do to bring prices under control and meet its 2% inflation target, despite recent progress. This could lead to further interest rate hikes to cool the economy and slow price increases.