WASHINGTON (NEWSnet/AP) — Higher energy and housing prices boosted overall U.S. inflation in December.

It's a sign that the Federal Reserve’s drive to slow inflation to its 2% target will likely remain bumpy.

Thursday’s report from the Labor Department showed that overall prices rose 0.3% from November and 3.4% from 12 months earlier. Those gains exceeded the previous 0.1% monthly rise and the 3.1% annual inflation in November. The December figures came in slightly above economists’ forecasts.

Housing costs accounted for more than half the price increase from November to December. Energy costs, led by electricity and gasoline, along with food prices, also contributed to the increase.

Excluding volatile food and energy costs, though, so-called core prices rose just 0.3% month over month, unchanged from November’s increase. Core prices were up 3.9% from a year earlier — the mildest such pace since May 2021 and down from November’s 4% year-over year gain. Economists pay particular attention to core prices because, by excluding costs that typically jump around from month to month, they are seen as a better guide to the likely path of inflation.

Overall inflation has cooled more or less steadily since hitting a four-decade high of 9.1% in mid-2022.

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