CPI Hits 2.5%, Highest Level in 9 Years

The Consumer Price Index (CPI) rose 2.5% in December, the largest 12-month increase since October 2012, according to the Bureau of Labor Statistics (BLS). The increase was driven by rising energy and food costs.

Energy Prices Soar

Energy prices jumped 28.2% over the past year, the largest 12-month increase since December 2010. Gasoline prices rose 49.6%, while natural gas prices increased 24.4%.

Food Costs Rise

Food prices rose 2.6% over the past year, the largest 12-month increase since February 2013. The increase was driven by rising prices for meat, poultry, fish, and eggs.

Core CPI Up 2.3%

The core CPI, which excludes volatile energy and food prices, rose 2.3% over the past year, the largest 12-month increase since July 2017. The increase was driven by rising prices for housing, transportation, and medical care.

Inflation Concerns Grow

The rising CPI has raised concerns about inflation. The Federal Reserve has indicated that it will be watching inflation closely and may start raising interest rates later this year if the pace of price increases continues.

What Does This Mean for Consumers?

The rising CPI means that consumers are paying more for goods and services. This can put a strain on household budgets and make it more difficult to save for the future.

Tips for Coping with Inflation

Here are a few tips for coping with inflation:

• Budget carefully. Track your expenses and identify areas where you can cut back.
• Negotiate your bills. Contact your creditors and ask for lower interest rates or payment plans.
• Shop around for the best deals. Compare prices before you buy and take advantage of sales and discounts.
• Consider refinancing your mortgage or auto loan. If interest rates have fallen, you may be able to save money by refinancing your debt.
• Invest in income-producing assets. Stocks, bonds, and real estate can provide a hedge against inflation by increasing in value over time.

The CPI: A Measure of Inflation

The CPI is a measure of inflation that tracks the prices of a basket of goods and services purchased by consumers. The BLS collects data from over 90,000 businesses and households each month to calculate the CPI.

The CPI is used by economists, businesses, and governments to track inflation and make economic decisions. It is also used to adjust wages, pensions, and other benefits for inflation.

Conclusion

The rising CPI is a sign that inflation is picking up. This is a concern for consumers, as it can put a strain on household budgets. However, there are a number of things that consumers can do to cope with inflation. By following the tips above, you can protect yourself from the effects of rising prices.

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