Consumer prices increased 0.3% in December, driven by rises in food and shelter costs, while the annual inflation rate remained unchanged at 2.7%, according to Bureau of Labor Statistics data released Tuesday.

The Consumer Price Index for All Urban Consumers (CPI-U) showed broad-based price pressures across essential categories, with food prices posting their largest monthly gain in recent months. The food index jumped 0.7% in December, matching increases in both grocery prices and restaurant meals.

The surge in food costs was widespread, with five of six major grocery categories posting increases. The “other food at home” category, which includes snacks, sauces, and frozen meals, rose 1.6%, while cereals and bakery products increased 0.6%. Fruits and vegetables climbed 0.5%, nonalcoholic beverages rose 0.4%, and dairy products gained 0.9%.

The exception was meats, poultry, fish, and eggs, which fell 0.2% due primarily to an 8.2% drop in egg prices. Over the past 12 months, food-at-home prices have risen 2.4%, while dining out costs have jumped 4.1%.

Shelter costs, which account for roughly one-third of the CPI basket, increased 0.4% in December. Owners’ equivalent rent and actual rent both rose 0.3%, while lodging away from home surged 2.9%.

The shelter index has risen 3.2% over the past year.

The energy index rose 0.3% in December. Natural gas prices jumped 4.4%, while electricity costs dipped 0.1%. Gasoline prices fell 0.5% on a seasonally adjusted basis, though unadjusted prices actually dropped 5.3%—a reminder of seasonal adjustment effects during winter months.

Over the 12-month period, energy prices have risen 2.3%, with electricity up 6.7% and natural gas soaring 10.8%. Gasoline prices have declined 3.4% compared to December 2024.

The index for all items less food and energy, often called core inflation, rose 0.2% in December and 2.6% over the past year. 

Notable December increases included recreation (+1.2%), which recorded its largest monthly increase since the index began in 1993, and airline fares, which jumped 5.2%. Apparel rose 0.6%, personal care increased 0.4%, and medical care gained 0.4%.

Declining categories provided some relief. Communication costs fell 1.9%, used cars and trucks dropped 1.1%, and household furnishings and operations decreased 0.5%.

The 2.7% annual inflation rate remains above the Fed’s 2% target but has moderated significantly from 2022 peaks.

The next CPI release, scheduled for February 11, 2026, will include January 2026 data and several index title changes, including renaming “care of invalids and elderly at home” to “home health care.”