The consumer price index (CPI) rose 2.9 percent year-over-year in December, the largest annual increase since July. When stripping out the more volatile food and energy sectors, core inflation slowed to 3.2 percent, from 3.3 percent.

U.S. consumer prices increased slightly more than expected in December amid higher costs for energy goods, pointing to still elevated inflation that aligns with the Federal Reserve's projections for fewer interest rate cuts this year.

The consumer price index, the cost shoppers pay for a wide range of goods and services, rose faster than expected in December but core items did not make the same jump, according to the latest report

The December inflation report shows that inflation rose by 0.4% month over month and 2.9% year over year. NBC News' Brian Cheung and Editor-in-Chief at Investopedia Caleb Silver break down the latest economic data.

Inflation probably picked up in late 2024, fueled by robust household spending amid a strong economy. A key gauge of inflation — the consumer price index — is expected to show Wednesday morning that prices rose by 2.9 percent in December from a year earlier, according to economists’ forecasts of data released by the Bureau of Labor Statistics.

Excluding the volatile food and energy categories, so-called core inflation declined to 3.2%, after remaining stuck at 3.3% for three months in a row.

U.S. producer prices rose less than expected in December as higher costs for goods were partially offset by stable services prices, suggesting inflation remained on a downward trend after progress had stalled in recent months.

The producer price index for final demand rose 0.2% last month after an unrevised 0.4% advance in November, the Labor Department's Bureau of Labor Statistics said on Tuesday.