The U.S. Bureau of Labor Statistics reported the consumer price index rose 0.5% in December, this follows a 0.8% increase in November. The index’s year-on-year rate is up a seasonally adjusted 7.0%, the fastest annual pace since June 1982, and follows a 6.8% reading in November. Much of the seasonally adjusted all-items increase is attributable to increases in the indexes for used cars and trucks (+3.5%), food (+0.5%), and shelter (+0.4). The all-items increase was partially offset by a decline in the energy index (-0.4%), as the indices for both gasoline (-.5%) and natural gas (-1.2%) dropped. Core CPI, which excludes the more volatile food and energy costs increased a seasonally adjusted 0.6% in December and follows November’s 0.5% reading. The annual rate of Core CPI inflation is 5.5% and follows a 4.9% increase in November, this is the largest year-on-year advance since February 1991. Along with the indices for shelter and for used cars and trucks, the indices for household furnishings and operations (+1.1%), apparel (+1.7%), new vehicles (+1.0%), and medical care (+0.3%) all increased.

The U.S. Bureau of Labor Statistics reported the Producer Price Index for final demand, which measures prices businesses receive for their final goods and services increased a seasonally adjusted 0.2% in December. On an unadjusted basis, the final demand index rose 9.7% for the 12 months ending in December, this is the largest increase since the government began calculating in 2010. The reading follows increases of 1.0% for November and 0.6% for October. The headline number reflects a decline in commodity prices for both food (-0.6%) and energy (-3.3%). Prices for final demand services increased 0.5%, with half of the broad-based advance attributed to a 0.8% increase in trade prices. Transportation and warehousing costs were up 1.7%. Goods prices declined 0.4% in December, the first drop since falling 2.8% in April 2020, a major factor in the decrease was a 6.1% drop in the index for gasoline. Core inflation at the wholesale level, which excludes the more volatile food and energy indices, increased 0.5% in December and follows a 0.8% jump in November. For 2021 core prices were up 6.9%, this follows a 1.3% advance for 2020.

The Commerce Department reported advance U.S. retail and food services sales declined 1.9% to $626.8B in December, this follows an upwardly revised 0.3% ($639.1B) in November. This is the first decrease after four consecutive months of sales increases and the steepest decline in 10 months. Retail sales are running 16.9% higher than a year ago. Total sales for October 2021 through December 2021 were up 17.1% year over year. Note, the data doesn’t adjust for inflation, meaning the actual decline is higher, as consumers bought goods for more money. Much of the overall drop in sales is attributable to an 8.7% decline in online sales. All but three sectors saw decreases, with department store sales dropping 7.0%, home furnishings down 5.5%, sporting goods and hobby falling 4.3%, clothing and accessory sales declining 3.1%, and restaurant sales dipping 0.8%. Core retail sales, which excludes automobiles, gasoline, building materials, and food services dropped 3.1% in December, the biggest decline since February 2021. November’s core retail sales figures were revised showing a larger 0.5% decrease rather than a 0.1%. drop.