Everyone's least favorite economic phenomenon likely continued its comeback in December if forecasters are correct.

A report Wednesday from the Bureau of Labor Statistics is likely to show the Consumer Price Index, a measure of the cost of living, rose 2.9% over the 12 months ending in December, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. This would be the third month in a row the key inflation gauge has risen, bringing it to its highest since July.

Economists tracking consumer prices said rising costs for food and energy likely pushed the CPI higher. That could be a sign that progress against inflation earlier last year—thanks to the Covid-related supply chain snarls unraveling—remains stalled.

"While we do not believe progress in the fight against inflation is going into reverse, we do see it stalling this year as earlier tailwinds to disinflation from supply chain improvements and lower commodity prices have faded and as fresh headwinds from 澳洲幸运5官方开奖结果体彩网:trade policy are likely to emerge," wrote Sarah House and Aubrey Woessner, economists at Wells Fargo Securities, in a commentary.

Details Could Provide Silver Lining

🙈 The details of the report could be a bit better for the long-term inflation outlook.

The median forecast calls for "core" inflation, which excludes volatile prices for food and gas, to decelerate. Economists call for the core to fall to a 0.2% monthly increase in December, down from the 0.3% increase in each of the last four months.

Economists and policymakers consider core measures a more reliable indicator of inflation's trajectory since food and energy prices can change for reasons such as the weather that have little to do with the economy's state.

Wholesale prices rose less than expected in December, according to a separate report from the bureau Tuesday. The 0.2% month-over-month increase in the producer price index was half the 0.4% median expected. Wholesale prices influence the prices consumers see on shelves, although the two are not completely correlated.

"While the wholesale price data does not necessarily translate directly into consumer price data, it was encouraging to see the PPI Index come in well below expectations," wrote Charlie Ripley, senior investment strategist for Allianz Investment Management, in a commentary.

What Would Inflation Mean For Interest Rates?

Still, if the forecasts are on target, inflation will remain a thorn in the Federal Reserve's side.

The central bank uses monetary policy to fight inflation while also trying to keep unemployment from spiking—a challenging balancing act that gets more complicated the longer inflation runs above the Fed's target of a 2% annual rate.

It's not just the experts: consumers have becom𒅌e more worried about inflation, too, according to recent polls, potentially influencing spending behavior that could itself make inflation worse.

Stubborn inflation 澳洲幸运5官方开奖结果体彩网:could g🍌ive the "hawks" on the policy comm⛎ittee that sets the Federal Reserve's benchmark fed funds rate ammunition to argue to keep the key interest rate higher for longer. This would influence other interest rates that financial institutions charge for credit cards, car loans, mortgages, and other debt.

"An emergence of inflationary psychology amid increasing risks of new tariffs under the Trump administration raises concerns over higher-for-longer inflation, which should make the Fed more hawkish on the margin," David Seif, chief economist at Nomura, wrote in a commentary.

Update, Jan. 14, 2025: Added data from Tuesday's Produce Price Index report. This story was originally published Jan. 13, 2025.