In December 2021, the Consumer Price Index for all Urban Consumers (CPI-U) was up by 0.5% on a seasonally adjusted basis. This was down from the 0.8% rise recorded in November 2021. However, the all items index has risen by 7.0% during the past 12 months, up from the figure of 6.8% recorded in the 12 months through November 2021 and once again representing the biggest 12-month increase since the period ending in June 1982.
Expectations about future inflation among U.S. consumers remained unchanged in December 2021 from November, the Federal Reserve Bank of New York reports. Meanwhile, uncertainty and disagreement about future inflation decreased. The median expectation among respondents was that inflation will be 6.0% during the next 12 months, declining to an average annual rate of 4.0% across the next three years.
- In December 2021, inflation, as measured by the CPI-U, posted its biggest 12-month increase since June 1982.
- The 12-month increase was 7.0%, up from 6.8% through November.
- Price hikes for shelter, vehicles, and food were major contributors to overall inflation.
- However, energy recorded its first monthly price dip since April 2021.
Shelter and Used Vehicles Lead Price Hikes
The December 2021 rise in the all items CPI-U was driven mainly by increases in the prices of shelter (up by 0.4% for the month) and used cars and trucks (up by 3.5% for the month). Food (up by 0.5% for the month) was another major contributor, although its rise was lower than in recent months, when it was up by as much as 0.9%.
Among other categories that recorded price increases were household furnishings and operations, apparel, new vehicles, and medical care. Declines were observed in December for motor vehicle insurance, recreation, and energy.
Over the past 12 months, the energy index was up by 29.3%, while the food index increased by 6.3%. For the month, energy was down by 0.4%, its first monthly decrease since April 2021.
The energy index was down by 0.4% in December, itself driven primarily by a declines of 0.5% in the gasoline index, 0.6% in energy commodities, 2.4% in fuel oil, and 1.2% in natural gas. Over the past 12 months, while the overall energy index was up by 29.3%, gasoline rose by 49.6%, energy commodities by 48.9%, fuel oil by 41.0%, utility piped gas service by 24.1%, energy services by 10.4%, and electricity by 6.3%.
The food index increased by 0.5% in December, with food at home having risen by 0.4% and food away from home by 0.6%. Over the past 12 months, the overall increase of 6.3% in the price of food includes a 6.5% rise in food at home and 6.0% for food away from home.
The rising prices of vehicles, both new and used, continue to be a major contributor to overall inflation. New vehicle prices rose by 1.0% in December and by 11.8% over the past 12 months. Used cars and trucks saw an increase of 3.5% in December and 37.3% over the past 12 months.