The Labor Department released the inflation report for December which showed prices were up 2.9% from a year ago, in line with economists expectations and up from 2.7% in November.

U.S. consumer prices increased slightly more than expected in December amid higher costs for energy goods, pointing to still elevated inflation that aligns with the Federal Reserve's projections for fewer interest rate cuts this year.

US inflation continued to heat up at the end of 2024. The consumer price index rose 2.9% year-over-year in December, above November's 2.7% rate.

However, excluding food and energy, the core CPI annual rate was 3.2%, a notch down from the month before and slightly better than the 3.3% forecast. The core measure rose 0.2% on a monthly basis, also 0.1 percentage point less than expected.

U.S. inflation picked up last month as gas prices rose sharply, though price gains for other goods and services were more muted.

Inflation probably picked up in late 2024, fueled by robust household spending amid a strong economy. A key gauge of inflation — the consumer price index — is expected to show Wednesday morning that prices rose by 2.9 percent in December from a year earlier, according to economists’ forecasts of data released by the Bureau of Labor Statistics.

Inflation resumed a cooling trend after a months-long interruption, offering some relief for economic policymakers who are worried President-elect Trump's agenda might ignite price pressures. Officials at the Federal Reserve have projected fewer interest rate cuts in 2025 than previously estimated on the back of stickier inflation.