Key Points
- U.S. consumer prices likely rebounded in December after being artificially restrained by government data gaps caused by a long shutdown.
- Economists expect a roughly 0.3% monthly increase and a 2.7% annual rise in the CPI, with core inflation also trending higher.
- Rent data distortions from the shutdown will take until around April 2026 to fully normalise, complicating inflation interpretation.
U.S. consumer prices are expected to have risen in December 2025 as inflation readings rebound following distortions caused by last year’s 43-day government shutdown, economists said.
The shutdown prevented full price data collection in October, leading statisticians to carry forward missing figures, particularly for rent and goods. Once that effect unwound, inflation measures likely reflected a more normal rise in costs.
Analysts forecast that the Consumer Price Index (CPI) climbed about 0.3% for the month and roughly 2.7% annually, matching earlier patterns once the paused data were absorbed back into the series.
This expected snap-back suggests that inflation remains persistent even as the Federal Reserve seeks to keep price growth near its 2% target and markets brace for future interest-rate decisions.
Experts also noted rising costs in categories such as vehicles, apparel and energy — including electricity linked to booming data-centre demand — could have pushed prices higher after the artificial dampening from missing data dissipated.
However, rent measures are not expected to fully return to normal until around April 2026, meaning some price components will still be adjusting in the months ahead. Economists say that tariff policies and broader economic uncertainty may also contribute to underlying inflationary pressures, complicating the outlook for policymakers.
Despite the predicted rebound, inflation remains below peaks seen earlier in the decade, though consumer prices have stayed elevated compared with pre-pandemic levels and continue to factor into household budgets.
The expected report follows months of mixed signals on U.S. price trends, as disruptions to data collection have made it harder to interpret CPI moves and gauge the true pace of inflation.
Core inflation, which excludes volatile food and energy costs, was also forecast to rise about 0.3% in December, reinforcing the view that underlying price pressures are still present.
With the Federal Reserve’s policy rate on hold and markets watching for signals on future cuts, inflation reports like this one could shape expectations for economic growth and interest-rate strategy in 2026.
