Economists expect December CPI to stay elevated amid post‑shutdown data distortions
Economists estimate the Labor Department’s December consumer price index, due this week, will show inflation running at about 2.6% year‑over‑year and 0.3% month‑over‑month, with similarly sized gains in the Fed’s preferred core measure, suggesting price pressures remain above the central bank’s 2% goal. The article explains that the six‑week federal shutdown last fall disrupted collection of price and rent data, likely biasing November inflation lower and making December’s rebound harder to predict as normal sampling resumes. It notes that despite the drop from the 9.1% June 2022 peak, prices for necessities like groceries are roughly 25% higher than before the pandemic, fueling persistent public anger over the economy even as the Fed debates whether to pause further rate cuts. The piece also points to political pressure on the Fed, with President Trump attacking Chair Jerome Powell for not cutting rates faster and the Justice Department issuing subpoenas tied to Powell’s June testimony about a $2.5 billion headquarters renovation, raising concerns about the central bank’s future independence in managing inflation.
📌 Key Facts
- FactSet consensus expects headline CPI to rise 2.6% year‑over‑year and 0.3% month‑over‑month in December 2025.
- Core CPI is forecast to rise 0.3% on the month and 2.7% from a year earlier, up from 2.6% in November.
- A six‑week federal shutdown last fall halted CPI data collection, leading to missing October data, quirks in November’s estimates and a likely rebound effect in December as full sampling resumes.
- The Fed’s policy rate is about 3.6% after a quarter‑point cut in December, and officials remain split over further easing while inflation runs near 3%.
- Prices for essentials such as groceries are about 25% higher than pre‑pandemic, contributing to voter dissatisfaction that both Trump and Biden have struggled to address.
📊 Relevant Data
In 2023, the median income for Black households was $56,490, compared to $84,630 for White households, representing a 33.3% gap.
Black-White Economic Disparities Continue to Widen — Word In Black
As of May 2025, Black workers earned 82.2% of White workers’ earnings, up from 81.0% in February 2025 and 81.8% in May 2024.
Economic Heterogeneity Indicators - National Full — Federal Reserve Bank of New York
Black Americans, Latinos, and Native Americans are substantially more likely than Whites to report serious financial problems due to inflation, based on a 2024 poll.
Poll: High U.S. inflation rates are having a more serious impact on Black Americans than White Americans — Harvard T.H. Chan School of Public Health
Inflation disparities across racial groups arise from differing consumption baskets, such as higher transportation spending among Hispanic households driving elevated inflation rates during periods of high vehicle and gas prices.
Breaking down inflation by race, age, parenthood, and more — Federal Reserve Bank of Minneapolis
📰 Source Timeline (1)
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