US inflation: Consumer prices steady in December but essentials like food, housing still rising; Donald Trump hails low numbers

US consumer inflation remained steady in December, suggesting that price pressures are gradually easing, even as core necessities like food and housing continue to burden American households, government data showed Tuesday.

Consumer prices rose 0.3% from November, unchanged from the previous month, while core inflation—excluding volatile food and energy—also climbed 0.2%, according to the Labour Department, reported news agency AP. On a year-on-year basis, the CPI rose 2.7%, while core inflation increased 2.6%, both matching November’s figures.Economists said the data indicate inflation may have peaked. “The recent run of figures suggests inflation has peaked,” Michael Pearce, chief US economist at Oxford Economics, noted.Falling gas and used car prices helped moderate the overall increase, though grocery prices jumped 0.7% month-on-month, and food costs rose 2.4% compared with a year ago. Electricity costs increased nearly 7% and natural gas by 11% in 2025, adding to affordability pressures, reported news agency AFP.The Federal Reserve has reduced its key interest rate by a quarter-point in December but is expected to remain cautious before further cuts.

John Williams, president of the New York Fed, said tariffs have likely raised inflation by about half a percentage point, though underlying trends are favourable, with inflation expected to decline toward 2% by 2027. Analysts highlighted that with inflation fears easing, the Fed may have flexibility to respond to downside risks in the labour market, but the recent DOJ grand jury investigation into Fed Chair Jerome Powell introduces additional uncertainty.President Donald Trump celebrated the inflation figures on social media, calling them “Great (LOW!) Inflation numbers for the USA” and urging Powell to cut rates “MEANINGFULLY!!!”

He also praised estimates of solid fourth-quarter growth and claimed credit for tariff measures impacting the economy.Despite the moderation in headline inflation, persistent increases in essentials such as food, rent, and utilities continue to strain household budgets, highlighting the ongoing political and economic challenges facing the US administration and the Fed.