Highlights
- Consumer price index rose 2.7 per cent in December, matching November's rate and exceeding Fed's 2 per cent target.
- Food prices and housing costs drove inflation higher, with polls showing Americans increasingly blame Trump administration.
- Federal Reserve chair Jerome Powell reveals Justice Department served grand jury subpoenas amid row over central bank independence.
The United States' inflation rate remained unchanged at 2.7 per cent in December, official data revealed on Tuesday, as president Donald Trump faces mounting public concern over the cost of living.
The consumer price index (CPI) figure, released ahead of Trump's economic speech in Detroit, matched November's reading but stayed significantly above the Federal Reserve's 2 per cent target.
Monthly inflation rose 0.3 per cent, driven primarily by higher food and housing costs.
The "core" inflation measure, which excludes volatile food and energy prices, increased 0.2 per cent month-on-month.
Samuel Tombs, chief US economist, attributed this growth to distortions from the longest government shutdown in American history rather than underlying economic momentum.
Political fallout intensifies
The persistent inflation figures come as public sentiment shifts against the Trump administration.
A Harris Poll conducted for the Guardian last month found twice as many Americans believe their financial security is worsening rather than improving, with growing numbers pointing fingers at the White House.
Trump has blamed the previous Biden administration for lingering inflation, despite it leaving office nearly a year ago. US inflation peaked at 9.1 per cent in June 2022, a 40-year high triggered by pandemic-related disruptions.
In response to affordability concerns, Trump has announced several measures including capping credit card interest rates and banning large institutional investors from purchasing single-family homes.
On social media, he celebrated what he called "Great (LOW!) Inflation numbers," suggesting his controversial tariff strategy was responsible claims economists have disputed.
Senator Elizabeth Warren criticised the administration's record, "For a year now, Donald Trump has raised costs for families despite his promise to lower them 'on day one'.
Today's data shows that inflation is still higher than it was when President Trump started his trade war in April."
The inflation data emerged amid an unprecedented clash between Trump and the Federal Reserve.
Powell disclosed on Sunday that the Justice Department had served the Fed with grand jury subpoenas on Friday, raising fears about threats to central bank independence.
