United States consumers and analysts have closely watched inflation trends as 2025 drew to a close, and recent data suggests that price pressures are moderating. According to forecasts, the core Consumer Price Index (CPI) rose 2.7% in December 2025 compared to the previous year, slightly above the 2.6% increase recorded in November. Despite this uptick, analysts noted that this represents the smallest annual rise in core inflation since early 2021, signaling a potential stabilization in the economy.
December CPI Report and Market Expectations
Earlier, analysts had anticipated that overall and core prices would increase by 0.3% month-on-month. However, the Bureau of Labor Statistics (BLS) announced that it could not publish the month-to-month revisions for the last CPI report due to disruptions caused by the recent government shutdown.
This delay created challenges for interpreting November’s data, which had shown a decline in the inflation rate. Additionally, difficulties in gathering accurate price data in October meant that key components like rent indexes were assumed to remain stable. These factors introduced some uncertainty in the inflation narrative, making the December report highly anticipated.
Optimism Despite Mixed Signals
Despite these complications, analysts and market observers expressed cautious optimism. The December CPI report, scheduled for release on Tuesday, 13 January, is expected to provide clearer insight into the inflation trajectory.
Analysts explained that the Federal Reserve’s decision to maintain interest rates is influenced by:
Insufficiently clear inflation readings from recent reports
Signs of stabilization in the US labor market, following reports of weak wage growth
They warned that the December CPI data might appear higher due to corrections in the downward trends observed in November, but emphasized that this does not necessarily indicate a return of high inflation.
Key Observations
Some analysts believe the November CPI report underestimated inflation, possibly by around 20 basis points.
Retailers have been reducing prices, and the effects of tariffs appear to have peaked, with several product categories already at maximum price levels.
Overall, while the December report might show a slight annual increase to 2.7%, the underlying trends point toward a slowing inflation environment, which could support a more stable economic outlook for early 2026.