Food costs climbed 0.7% in December, the largest monthly jump since October 2022, while gasoline, used cars, and trucks fell

Inflation stayed relatively steady at the end of 2025, easing fears that tariffs would drive prices higher.

The Labor Department reported consumer prices rose 2.7% in December from a year earlier, matching November’s pace and economists’ expectations. Core prices, which strip out food and energy, also rose 2.6% annually.

Tariffs had a muted effect, as some companies absorbed costs or raised prices slowly.

Falling used vehicle prices helped curb inflation, though higher grocery costs stalled progress toward the Fed’s 2% goal.

Food costs climbed 0.7% in December, the largest monthly jump since October 2022.

The Federal Reserve, which cut rates three times last year, can now focus on the cooling labor market. 

Job growth slowed to its lowest pace since 2003, and real weekly earnings fell 0.3%. Economists say inflation may have peaked.