The December Consumer Price index (CPI) came in slightly above forecast as energy prices edged higher while shelter costs remained frustratingly sticky.  Headline CPI rose +0.3% last month, just above the +0.2% median forecast. On a year-over-year basis, CPI was up +3.4%, higher than the +3.2% median forecast and a notable increase from the +3.1% annual pace in November.

The primary contributor to the warmer-than-expected consumer inflation was the cost of shelter, up +0.5% for the month and +6.2% year-over-year, despite ample evidence that rent prices are declining. Energy prices also added upward pressure last month. Gasoline rose +0.2% after back-to-back declines of -5.0% (Oct) and -6.0% (Nov).

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