The December consumer price index report will offer a final read on a year in which inflation gradually eased on paper, even as many Americans continued to feel squeezed by high prices.
Gasoline prices fell over the course of 2025, but electricity costs climbed. Asking rent prices decelerated, but most households still felt it was difficult to cover the cost of groceries.
Economists expect the Jan. 12 report to reveal prices rose about 2.8% in the twelve months ending in December. While inflation remained well below the highs reached in 2022 and 2023, it also proved more stubborn than many forecasters expected in 2025, as price growth remained above the Federal Reserve’s 2% target throughout the year.
“It’s not where the Fed wants it, but it’s not the end of the world either,” AlphaCore Wealth Advisory Chief Investment Strategist David Stubbs said.
Consumers believe prices will continue to rise in 2026, according to the New York Fed’s December 2025 Survey of Consumer Expectations. Respondents expected near-term inflation to rise to 3.4%, and to have more trouble paying down debt in the next three months.
