Key takeaways:

• Inflation stayed at 2.7% year over year as the Consumer Price Index rose 0.3% in December.
• Food prices edged higher, but yearly grocery inflation remained below the overall rate, with declines in eggs and other key staples.
• Recreation and hobby costs jumped, including audio equipment and music subscriptions.

The cost of living for Americans ticked higher in December as the Consumer Price Index rose 0.3%, leaving the overall annual rate of inflation unchanged at 2.7%^.1

The modest rise was in line or slightly below expectations. A deeper dive into the numbers showed a nuanced picture as overall food and energy costs continued to rise ── but with price relief on some key consumer staples like eggs and refrigerated goods.₂

The prices in the food at home category increased 0.7% from November to December, but the gains remain lower on a yearly basis (2.4%) than overall inflation. Food at restaurants was a different story: up 4.1% year over year, including an 0.7% bump in December.³ 

Foods that have seen the largest price gains over the past year in the December CPI are coffee (19.8%) and ground beef (15.5%). Other top gainers in the food at home category include:⁴

• Candy and chewing gum: +10%
• Frozen seafood: +8.6%
• Lettuce: +7.3%
• Bananas: +5.9%

By contrast, several food items recorded price declines over the same 12-month period, including eggs (-20.9%), potatoes (-3.4%), tomatoes (-3%), refrigerated and frozen baked goods (-2.6%), butter and margarine (-2.2%), and rice and pasta (-1.7%).⁵

Home electricity costs are up 6.7% over the past year and overall utilities are up 10.8% from December 2024 to December 2025.6

But December’s CPI saw good news elsewhere. Core inflation, the overall price of goods minus food and energy, held steady at 2.6%, unchanged for the first time since tariffs went into effect last year.₇

Read more: What causes inflation?

Prices ease on cars, appliances, and furniture

The used cars and trucks index fell 1.1% in December while the index for new vehicles was unchanged month over month. Car maintenance and repair costs dipped 0.5% while car insurance costs fell 1.3% from November.

Airline fares also fell  0.5% in December, with the overall transportation services category logging a 0.5% drop in prices last month.⁸

The index for household furnishings and operations decreased 0.5 percent over the month, including a 1.3% drop in living room, kitchen, and dining room furniture. Prices remain 4% higher on a yearly basis, as the U.S. moves to suspend additional tariffs on those goods.

Appliance prices fell 5.1% in December and are 1.7% lower on a yearly basis.

Read more: Tariffs on wood and furniture imports could hit home

Hobbies and leisure costs on the rise

The recreation index moved 1.2% higher in December, driven by goods and services where consumers continue to spend on leisure and hobbies. It’s the largest 1-month increase in the category ever reported, according to the Bureau of Labor Statistics.⁹

Audio equipment jumped 13.3% during the holiday month, while recorded music and music subscriptions saw a 3.2% gain from November to December.

Music instruments and accessories saw a 4.2% monthly gain and photo equipment and supplies jumped 9.8%. Fees for lessons and instruction — covering activities such as art, music, and fitness classes — rose 2.7%.

But it wasn’t all bad news for hobby enthusiasts. Prices for sewing machines, fabric, and supplies fell 2.7% in December. Elsewhere, the cost of recreational books and other leisure reading declined 0.8% for the month.

Read more:  Hobby nation: How Americans are spending their 5-to-9