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Inflation, as measured by the Consumer Price Index for all Urban Consumers (CPI-U), rose 6.5 percent nationwide in the 12 months ending December ’22. This is the smallest 12-month increase since October ’21. The annual inflation rate peaked at 9.1 in June and has trended down since. 

In Houston, prices rose 5.3 percent over the year, a significant improvement over the 10.2 percent recorded in June. 

The U.S. core inflation rate, which excludes volatile food and energy, came in at 5.7 percent. Houston’s core rate was 5.2 percent.

The December reports underscore that inflation has turned a corner following last year’s surge. The data should nudge the Fed closer to moderating interest-rate increases at its next few meetings. The bank raised rates 75 basis points in June, July, September, and November, 50 basis points in December, and will likely reduce that to 25 basis points at its January and February meetings.

The next release of CPI data will be on Tuesday, February 14, 2023, and cover the 12 months ending January ’23.

Prepared by Greater Houston Partnership Research

Patrick Jankowski, CERP
Chief Economist
Senior Vice President, Research
pjankowski@houston.org

Clara Richardson
Research Associate
crichardson@houston.org