What is the inflation rate currently
Executive summary
The most recent official Consumer Price Index (CPI) data show headline U.S. inflation running at 2.7% for the 12 months ending December 2025, unchanged from November, with the monthly CPI up 0.3% in December on a seasonally adjusted basis (BLS release) [1] [2]. January 2026 CPI data are scheduled for release on February 11, 2026, so the December figure is the latest complete official reading available [1] [3].
1. What the headline number means: 2.7% and the December monthly bump
The headline CPI—the Bureau of Labor Statistics measure for urban consumers—registered a 2.7% year‑over‑year increase for the 12 months ending December 2025, which is the statistic most often cited by news outlets and commentators [1] [4]; that monthly report also showed a 0.3% seasonally adjusted increase in December, indicating price gains continued at month‑end [2] [5].
2. Core inflation and other gauges: beneath the headline
Core CPI, which strips out food and energy, was slightly lower than headline in December and hovered near 2.6%, a signal the underlying trend is cooler than some volatile components but still above the Federal Reserve’s 2% target and important for policymakers weighing rate moves [6] [5]; meanwhile, market and academic nowcasts such as those from the Cleveland Fed provide daily estimates of both CPI and the Fed‑favored PCE gauge, and have been used to flag upside risks that CPI alone may understate [7] [6].
3. Why numbers can differ: CPI vs. PCE, revisions, and measurement quirks
Economists caution that CPI and PCE (personal consumption expenditures) measure slightly different baskets and weighting methods—PCE often runs a bit lower and better reflects shifting consumer spending patterns—and monthly series are subject to revisions and seasonal‑factor updates scheduled periodically by the BLS [6] [2] [3]; the BLS also warns that indexes for the past 10–12 months can be revised, and title and methodology changes will accompany the January 2026 publication [2] [8].
4. The narrative split: is inflation easing or lurking beneath the surface?
Some forecasters and market analysts describe the recent pattern as disinflationary momentum that should allow inflation to drift toward the Fed’s target later in 2026, with housing expected to pull down overall inflation [9] [10]; others—including Reuters and some Wall Street firms—argue that underlying spending patterns and PCE nowcasts show upside risks that make the picture “stronger than it looks,” indicating policymakers should not assume a smooth decline [6] [7].
5. Policy and political stakes: tariffs, rate bets and the next data point
Political debate has already seized on the 2.7% figure—used to press the Federal Reserve on rate policy—and analysts warn that tariff pass‑throughs and fiscal moves could lift inflation again, a scenario embedded in some forecasts that project inflation around the mid‑2% range for 2026 if tariffs persist [5] [11] [10]; the next definitive datapoint to watch is the January 2026 CPI released Feb. 11, 2026, which will update the 12‑month comparison and could shift market and policy expectations [1] [3].