US Inflation Drops to 2.7%, Lowest Since July

Washington – Recent data has shown that the annual inflation rate in the United States has slowed to 2.7% in December 2025, the lowest level since July. This is lower than market expectations of 3.1%, down from 3% in September, reinforcing bets on a more flexible US monetary policy in the near future.

Energy and Food Continue to Apply Pressure

Despite the overall decline in inflation, the energy index recorded an annual increase of 4.2%, driven by rising prices of:

• Gasoline: +0.9%
• Fuel Oil: +11.3%
• Natural Gas: +9.1%

Food prices also rose by 2.6%, while housing costs increased by approximately 3%, reflecting ongoing pressures related to rents and services.

Broad Slowdown in Core Inflation

In other sectors, prices showed notable increases in:

• Medical Care: +2.9%
• Furniture and Bedding: +4.6%
• Recreation: +1.8%
• Used Cars and Trucks: +3.6%

Conversely, increases were limited in:

• Clothing: +0.2%
• New Cars: +0.6%

The core inflation rate (excluding food and energy) has decreased to 2.6%, the lowest level since March 2021, compared to expectations of 3%, indicating a clear easing of structural price pressures in the US economy.

Data Distortions Due to Government Shutdown

Data indicated that the US Bureau of Labor Statistics (BLS) was unable to collect data for October 2025 due to a 43-day government shutdown, leading to the absence of October figures and the lack of complete monthly data for November, necessitating caution in interpreting short-term trends.

Implications for Monetary Policy

This decline in both core and overall inflation bolsters expectations that the Federal Reserve may move towards cutting interest rates or keeping them steady for a longer period, should price indicators and the labor market continue to slow without new pressures.