Hardware Retailing The Industry's Source for Insights and Information
Inflation held steady in December, matching November’s reading, according to the latest report from the Bureau of Labor Statistics (BLS). This report was the first to include a month-to-month figure since the government shutdown, but data distortions from the shutdown continue to affect key inflation measures, particularly housing, according to an analysis from the National Association of Home Builders’ Eye on Housing.
The Consumer Price Index (CPI) rose 2.7% in December, compared to a year prior. The core CPI, excluding food and energy components, increased by 2.6% over the past year. The housing shelter index, a large part of the core CPI, increased 3.2% over the year. Shelter accounts for 36.7% of the CPI and contributed around 58% of total inflation in 2024.
The CPI rose by 0.3% in December seasonally adjusted and the core CPI increased by 0.2%. The price index for a broad set of energy sources rose by 0.3% in December, with declines in fuel oil (-1.5%), gasoline (-0.5%) and electricity (-0.1%).
The index for shelter was the largest contributor to the overall monthly increase in all items. The index for shelter, which makes up over 40% of the core CPI, rose by 0.4% in December.
NAHB constructs a “real” rent index to indicate whether inflation in rents is faster or slower than core inflation. It provides insight into the supply and demand conditions for rental housing. When inflation in rents is rising faster than core inflation, the real rent index rises and vice versa. The real rent index is calculated by dividing the price index for rent by the core CPI (to exclude the volatile food and energy components).
In December, the Real Rent Index remained unchanged. Due to the missing October data, the average monthly growth rate for 2025 cannot be directly compared to prior years.
