Inflation increased in December to its highest level since July, with much of the increase driven by rising energy and food prices.

The Department of Labor announced consumer price index (CPI) – a broad measure of the cost of everyday goods such as gas, groceries and rent – in December, which showed prices were 2.9% higher than a year ago after a 0.4% increase compared to the previous month, which was greater than LSEG economists estimated.

Much of the price increase was due to rising energy and food costs that are taking a toll on family budgets.

More than 40% of the monthly increase in the CPI was attributed to rising energy prices, as the Bureau of Labor Statistics’ energy index rose 2.6% in December after energy prices had shown little change in previous months and fell 0.5% on an annual basis. month

INFLATION INCREASED 2.9% IN DECEMBER, IN LINE WITH EXPECTATIONS

Energy prices registered a notable increase in December, with gas making a notable contribution. (Luis Sinco/Los Angeles Times via Getty Images/File)

Energy prices they were flat in July, then posted declines of 0.8% and 1.9% in August and September, respectively, before flattening out in October. They rose 0.2% in November before a larger increase of 2.6% in December.

Gas prices they contributed significantly to the rise in the energy index, as they increased by 4.4% in December. Similar to the broader energy index, gas prices had fallen 0.6% in August, 4.1% in September and 0.9% in October before rising at the end of ‘year with a 0.6% gain in November, ahead of last month’s biggest increase. .

The price of utility gas service it also rose in December, up 2.4% month-on-month and 4.9% year-on-year.

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Food prices it also posted a notable increase in December, up 0.3% for the month. Unlike the trend in energy prices, food costs have registered similar increases in recent months.

Since June, the smallest monthly increases in food prices were 0.1% in June, July and 0.2% in October. Larger increases of 0.4% were reported in September and November ahead of the December CPI report.

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An outbreak of bird flu has strained egg supplies, contributing to higher prices. (Reuters/Dado Ruvic/File)

Within the BLS Food Price Index, the cost of food away from home has increased twice as much as food at home over the past year, with the former rising 3.6% in the past 12 months compared to 1.8% in the second.

Eggs continued to experience significant price volatility among foods tracked by the BLS, rising 3.2% in December to push the 12-month increase to 36.8%. The supply of eggs has been disrupted by an outbreak of bird flu over the past year.

The US Department of Agriculture noted in a report this month: “Supply remains the biggest challenge in the market as highly pathogenic avian influenza (HPAI) continues to affect commercial table egg flocks heading into the new year.”

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Beef prices also rose at a faster pace than overall food prices in December on both an annual and monthly basis. Beef prices rose 0.5% in December from the previous month and rose 4.9% from a year ago.