Published on January 15, 2026 by Price Inflation Report

The Dry Take

Overall prices rose modestly in December 2025. The Consumer Price Index (CPI), which tracks what consumers pay for a broad basket of goods and services, increased 0.3% from November 2025 and was up 2.7% over the past year. Housing remained a key driver, with rents and related costs rising 0.4% in the month and 3.6% over the year. Food and beverages saw a sizable monthly increase of 0.7% and are 3.0% higher than a year ago. Medical care prices also increased (0.4% monthly; 3.2% annually). Transportation prices were flat in December and only slightly higher than a year ago (0.4%). Offsetting some of these increases, communication services fell sharply in December 2025 and are lower than last year.

What It All Means

For a typical American household, prices are still rising, but at a much more manageable pace than during the recent peak inflation period (Apr. 2021 - May 2023). Rent, groceries, healthcare, and recreation continue to put pressure on household budgets, while relief is coming from areas like phone and internet services and relatively stable transportation costs. With total inflation running at 2.7%, purchasing power is no longer eroding as quickly as during the peak inflation period, but everyday essentials still cost more than they did a year ago. Put simply, a basket of goods and services that cost $100 in December 2025 would have cost about $97 in December 2024.

Consumer Price Changes: December 2025

Data source

Consumer Price Index, U.S. Bureau of Labor Statistics

Written by Price Inflation Report