US CPI December Reading: What to Expect After November's Distortions

Government Shutdown Created Data Anomalies

The historic 43-day government shutdown disrupted normal economic data collection processes, leaving the Bureau of Labor Statistics with incomplete information for the October period. As a result, officials relied on September price figures to fill gaps, creating artificial distortions that skewed the November CPI reading lower than actual market conditions warranted. This irregularity set the stage for a notable correction in the next monthly release.

December CPI Likely to Show Faster Monthly Growth

Anticipating a rebound from November’s artificially suppressed figures, December’s US CPI is expected to display a more pronounced month-over-month increase in consumer prices. However, the year-over-year perspective tells a different story. Both headline and core CPI inflation metrics are projected to cool further, with headline CPI estimated at 2.7% and core CPI at 2.8%—both falling short of September’s readings.

Inflation Trajectory Continues Downward

These anticipated December CPI figures suggest that the broader inflation trend remains on a cooling path despite the monthly uptick. The disparity between strengthening monthly data and weakening annual comparisons indicates that price pressures are moderating when viewed through a longer-term lens. This dynamic is particularly relevant for market participants monitoring monetary policy expectations and the inflation debate.

The December US CPI release will serve as an important reality check, separating the statistical noise created by the shutdown from genuine economic momentum in consumer price growth.