US INFLATION EDGES UP, FUELED BY ENERGY AND HOUSING PRICES, BUT MANY OTHER COSTS RISE ONLY MILDLY

Higher energy and housing prices boosted overall U.S. inflation in December, a sign that the Federal Reserve’s drive to slow inflation to its 2% target will likely remain a bumpy one.

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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 were slightly above economists’ forecasts.

More than half the increase in prices from November to December reflected higher housing costs. Energy costs, led by electricity and gasoline, along with food prices, also contributed to inflation.

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. 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.

Inflation has cooled more or less steadily since hitting a four-decade high of 9.1% in mid-2022. Still, despite the slowdown in price increases, along with steady economic growth, low unemployment and healthy hiring, polls show many Americans are dissatisfied with the economy