WASHINGTON, January 31, 2025 – Inflation in the United States continued its upward trajectory in December, reaching 2.6% year-on-year, an increase from 2.4% in the previous month, according to the PCE index released on Friday by the Department of Commerce.
On a monthly basis, inflation also rose to 0.3%, compared to 0.1% in November, aligning with analysts’ expectations.
The core PCE index, which excludes the volatile prices of energy and food, experienced a monthly increase of 0.2%, up from 0.1% in November, while remaining stable year-on-year at 2.8%.
This index is preferred by the Federal Reserve for guiding its monetary policy, as the institution aims for an inflation rate of 2%.
Such a level of inflation could strengthen the Fed’s decision to maintain its key interest rates, particularly in light of the lack of evidence indicating weakness in the labor market or a slowdown in consumer spending.
On Thursday, GDP figures revealed that U.S. economic growth remained robust in 2024, recording a rate of 2.8%, despite a deceleration in the final quarter.
According to the PCE index, household incomes rose by 0.4% in December, surpassing the prior month’s increase of 0.3%. Expenditures also accelerated, climbing by 0.7% compared to 0.4% in November.
