The US Bureau of Labor Statistics (BLS) said the Consumer Price Index (CPI) rose 0.3% month-on-month in December 2025 (seasonally adjusted), and inflation held at 2.7% year-on-year.
Core CPI (excluding food and energy) rose 0.2% in December and was up 2.6% over the past 12 months, pointing to a steady inflation trend heading into 2026.
Updated: Tuesday, 13 January 2026 (IST)
What the CPI Data Says Today
BLS reported that shelter was a major contributor to December’s monthly CPI rise, with the shelter index up 0.4%.
Food prices increased, with the overall food index rising 0.7% (food at home 0.7% and food away from home 0.7%).
Energy also moved higher, with the energy index up 0.3% over the month.
What Got More Expensive (and What Got Cheaper)
On the “core” side, BLS noted several categories rising in December, including recreation, airline fares, medical care, apparel, personal care, and education.
Some categories fell and helped offset the overall rise:
- Communication (-1.9%)
- Used cars and trucks (-1.1%)
- Household furnishings and operations (-0.5%)
One standout: the recreation index rose 1.2% in December, which BLS describes as the largest 1-month increase ever reported for that index (first published in 1993).
Why Markets Reacted and What the Fed May Do Next
Multiple outlets described inflation as holding near a multi-year low, while core inflation came in at 2.6% year-on-year.
Reuters reported the data reinforced expectations that the US Federal Reserve would hold rates steady at its Jan 27–28 meeting, with the Fed expected to keep the target range at 3.50%–3.75%.
Bloomberg said interest-rate swaps showed traders saw no chance of a cut later this month, while a reduction was fully priced in by June.
What’s next: BLS has scheduled the January 2026 CPI release for 11 February 2026.
Local Impact: What This Could Mean for India and J&K Readers
US CPI data often matters globally because it can shift expectations for US interest rates, influencing the dollar, global borrowing costs, and investor risk appetite.
For India (including J&K), spillovers typically show up through market sentiment, currency moves, and commodity-linked pressures (especially energy), even if day-to-day inflation is driven mainly by domestic factors.
Key Highlights / Summary Box
CPI rose 0.3% in December and inflation held at 2.7% year-on-year, BLS said.
Shelter (+0.4%) was a major contributor to the monthly increase; food rose 0.7% and energy rose 0.3%.
Reuters said the Fed is expected to keep the target range at 3.50%–3.75% at the late-January meeting.
Conclusion/Verdict
The December 2025 CPI report points to steady inflation rather than a fresh surge: headline inflation remained at 2.7%, while core inflation stayed at 2.6% year-on-year.
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FAQs
A1: BLS reports CPI rose 0.3% in December (seasonally adjusted) and was up 2.7% year-on-year.
A2: Core CPI (excluding food and energy) rose 0.2% in December and was up 2.6% over the past 12 months, per BLS.
Disclaimer: This report is for information only and does not provide financial or investment advice.
