December's inflation report looked perfectly boring at first glance. The Consumer Price Index came in at 2.7% year over year, unchanged from November and exactly what economists expected, according to the Bureau of Labor Statistics. Prices ticked up 0.3% from the prior month, also right on target. Core CPI, which strips out volatile food and energy costs, rose 2.6% annually and 0.2% monthly, slightly below forecasts.
But here's the thing about averages: they hide a lot of chaos underneath. And when you actually look at what's happening inside those numbers, several categories are still running hot enough to make household budgets feel tight, especially in housing, food, and utilities.
The Outliers That Actually Matter
While most inflation categories behaved themselves in December, a few items posted the kind of increases that make you double-check your receipt.
The most dramatic single-item spike came from subscription and rental of video and video games, which rocketed up nearly 20% in just one month. That's the biggest monthly jump anywhere in the entire CPI basket, which is saying something.
Food prices weren't exactly calm either. Overall food costs climbed 0.7% in December, and the pain was spread evenly across the board. Grocery prices rose 0.7%, and so did food away from home. Over the past year, food is up 3.1% overall, with groceries higher by 2.4% and restaurant prices up 4.1%. Full-service meals are particularly brutal right now, up nearly 5% annually.
Individual items tell an even sharper story. Oranges, including tangerines, jumped 5.5% in December alone. Pork chops climbed 5.0% over the month. Even pantry staples felt the squeeze, with peanut butter up more than 4% and fresh biscuits, rolls and muffins rising 2.0%.
The year-over-year numbers are where things get really eye-catching. Beef and veal prices are up 16.4%, with some cuts doing even worse—uncooked beef steaks have climbed 17.8%. But the real standout is coffee, up nearly 20% from a year ago. Roasted coffee is up 18.7%, and instant coffee has surged a staggering 28.0%. If your morning routine feels more expensive, that's because it is.
Utilities delivered another quiet gut punch. Utility gas service surged 4.4% in December, continuing a trend that's pushed the category up more than 10% over the past year. That's a meaningful hit for households just as winter heating demand kicks into high gear.
Travel costs also flared up unexpectedly. Airline fares jumped 5.2% in December, reversing earlier softness and reminding everyone how quickly prices can snap back during peak travel periods.
Where Things Actually Got Cheaper
Not everything went up. Some categories delivered sharp monthly declines in December, offering real relief beneath that steady headline number.
Moving, storage and freight expenses posted the biggest monthly drop, falling 14.3%. They're now down 17.0% from a year ago, which is great news if you're planning a move.
Egg prices fell another 8.2% in December, extending their slide to down 20.9% year over year. That's the biggest annual decline among major food items, and a welcome reversal after the chaos of last year.
Big-ticket household goods also saw meaningful price cuts. Other appliances dropped 5.2% on the month, major appliances fell 4.3%, and laundry equipment declined 4.1%, reflecting continued cooling in durable goods inflation.
Some service categories offered relief too. Tax preparation and accounting fees fell 4.5% in December, while motor vehicle insurance declined 3.7% and checking and other bank services dropped 3.5% over the month.
Fuel-related costs moved lower as well, with other motor fuels down 3.5% in December, adding to the broader cooling in energy prices. Used cars and trucks also continued their slide, declining 1.1% over the month. Additional declines showed up in communication services and household furnishings, both of which fell in December.
