Financial News: U.S. Consumer Prices Rise 0.4% In December, Annual

U.S. Consumer Prices Rise 0.4% In December, Annual Growth Unexpectedly Ticks Higher

02/20/2026 - 10:20:00 (RTTNews)

(RTTNews) - A highly anticipated report released by the Commerce Department on Friday showed consumer prices in the U.S. increased by slightly more than expected in the month of December.

The Commerce Department said its personal consumption expenditures (PCE) price index climbed by 0.4 percent in December after inching up by 0.2 percent in November. Economists had expected prices to rise by 0.3 percent.

The slightly bigger than expected monthly increase by prices came as prices for goods grew by 0.4 percent and prices for services rose by 0.3 percent.

The report also said the PCE price index in December was up by 2.9 percent compared to the same month a year ago, reflecting an uptick from 2.8 percent in November. The annual rate of growth was expected to remain unchanged.

Excluding food and energy prices, the core PCE price index still increased by 0.4 percent in December after rising by 0.2 percent in November. Core prices were expected to grow by 0.3 percent.

The annual rate of growth by the core PCE price index also accelerated to 3.0 percent in December from 2.8 percent in November. Economists had the pace of growth to inch up to 2.9 percent.

"The higher inflation reading justifies the Fed moving to the sidelines and holding the policy rate steady for a while longer," said Nationwide Chief Economist Kathy Bostjancic.

The Federal Reserve's preferred readings on consumer price inflation were included in the Commerce Department's report on personal income and spending.

The report said personal income rose by 0.3 percent in December after climbing by an upwardly revised 0.4 percent in November.

Economists had expected personal income to rise by 0.3 percent, matching the increase originally reported for the previous month.

Disposable personal income, or personal income less personal current taxes, rose by 0.3 percent for the second consecutive month.

Meanwhile, the Commerce Department said personal spending grew by 0.4 percent in December, matching a downwardly revised increase in November as well as economist estimates.

With spending climbing more than income, personal saving as a percentage of disposable personal income edged down to 3.6 percent in December from a revised 3.7 percent in November.

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