Consumer prices increased more than expected in December, driven by a continued uptick in shelter prices, according to the Consumer Price Index (CPI) released by the Bureau of Labor Statistics (BLS). 

On an annual basis, prices rose 3.4% in December, up from 3.1% growth last month and above economists’ expectations. Core inflation, which excludes more volatile food and energy prices, increased by the same 0.3% it did in November. On an annual basis, Core CPI slowed less than expected to 3.9%.

Shelter costs continued to weigh heavily on inflation, contributing to over half of the monthly increase. A rise in gas, electricity and food prices also added to what consumers spent in December. Gas prices were up 0.2% after having dropped 6% in November. Grocery prices rose 0.1% over the month, and food prices away from home rose 0.3%.

The report followed news last Friday that the economy added 216,000 jobs in November, with annual wage growth increasing.

The numbers have drawn some concern that it could delay the timeline for the Federal Reserve to begin dialing back interest rates. During its December meeting, the central bank announced a third interest rate pause, leaving the federal funds rate at a 22-year high of 5.25% to 5.5%. However, Fed officials hinted that they could begin rate cuts this year, with interest rates expected to drop to 4.6%, according to updated economic forecasts in the central bank’s Summary of Economic Projections (SEP). 

“The monthly increases in prices for food, housing, and core services rose at similar rates to those registered in November, while energy and core goods prices – which had previously been contributing downward pressure on topline inflation – stayed relatively flat,” Kayla Bruun, a senior economist at decision intelligence company Morning Consult, said in a statement. “Morning Consult’s data showed consumer demand strengthened for various goods in late 2023, potentially lending price support to these categories. 

“With much of the inflation slowdown thus far tied to goods, a reversal in the downward trend could pose another obstacle to the Fed in its pursuit of its 2% inflation goal,” Bruun continued.

If you are struggling with high inflation, you could consider taking out a personal loan to pay down debt at a lower interest rate, reducing your monthly payments. You can visit Credible to find your personalized interest rate without affecting your credit score.

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Market expectations were that the Fed would begin cutting rates as early as its March meeting. While the stronger-than-anticipated economic figures don’t take rate reduction off the table, it’s likely to push them further into the future, according to Realtor.com Chief Economist Danielle Hale.

“For the housing market, this means that the significant decline in mortgage rates observed since October may have gotten ahead of the data,” Hale said in a statement. 

Mortgage rates have already steadied since their steady decline between late October and mid-December. According to Hale, a more meaningful drop in rates will depend on how soon the Fed reverses course on interest rates, and today’s CPI reading could push rates up again.

Shelter costs are expected to keep dropping and could help further moderate inflation in the coming months, but they would need to fall to roughly 3.5% for inflation to come in consistently on target.

“With market asking rents notching a seventh month of decline and additional weakness forecast for the rental market in 2024 as much needed supply is completed and becomes available, I expect further slowing of shelter inflation and thus the overall rate of price gains in the months ahead,” Hale said.

If you’re looking to become a homeowner, you could still find the best mortgage rates by shopping around. Visit Credible to compare your options without affecting your credit score. 

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 Americans are feeling more confident about their finances, according to WalletHub’s most recent Economic Index. The index, which measures consumers’ confidence about their financial outlook, increased by 15% between December 2022 and December 2023. Consumers’ six-month outlook on their finances reached the highest level of optimism recorded since December 2020, the survey said. 

The share of consumers who expected to have less debt after the next six months increased by 4.4% in December 2023 compared to last year, the survey said. In addition, consumers’ confidence in reducing their debt over the next six months has hit the highest level recorded since December 2020.

“The 15% increase in consumer sentiment over the past year is an encouraging sign that our economy is recovering from the damage it suffered as a result of the pandemic and inflation,” WalletHub Analyst Cassandra Happe said. “People who have high financial confidence are likely to spend more money and reduce their debts, both of which are good for the economy as a whole.”

If you’re interested in paying off high-interest debt with a personal loan, you could visit the Credible marketplace to learn more about your options and speak with an expert to get your questions answered.

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Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at moneyexpert@credible.com and your question might be answered by Credible in our Money Expert column.

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North Carolina closed out last year by becoming the most recent state to divest its public employee pension from the corporate parent of Ben & Jerry’s over the ice cream company’s boycott of Israel. 

North Carolina is a swing state in politics. Other states to pull retirement funds over Ben & Jerry’s boycott of Israel span the traditional political boundaries and include Arizona, Florida, Illinois, New Jersey, New York and Texas.

“We are where we are. We don’t pick which laws to apply and who to apply them to,” State Treasurer Dale Folwell, a Republican, told FOX Business in an interview this week. “I wish I never heard of this subject and wish we didn’t have to do what we had to do.”

Folwell announced last month the North Carolina Retirement Systems – which provides retirement benefits for more than 1 million members, including teachers, firefighters, police officers and government employees – is withdrawing $40 million from Ben & Jerry’s and affiliates. This includes its parent company, Unilever PLC, a U.K.-based company.

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The North Carolina Department of State Treasurer manages the pension plans’ investments, currently totaling $117.9 billion.

Ben & Jerry’s, a company long known for its left-leaning advocacy, maintained an independent board of directors to continue its activism even after it sold to Unilever. 

It’s not likely Unilever anticipated allowing the popular ice cream brand to have its own board would lead to so many problems, Folwell said. 

“I don’t know the people at Ben & Jerry’s. I respect their entrepreneurship. I think when they signed the contract, Ben & Jerry’s anticipated something like this,” said Folwell, also a 2024 candidate for governor. “Unilever didn’t anticipate anything like this. Generally, when a parent tells a kid not to do something, they expect them to listen.”

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In the face of the BDS movement – short for boycott, divest and sanction – the North Carolina legislature passed a law in 2017 that prohibits “the North Carolina Retirement Systems or the Department of State Treasurer from investing in any company engaged in a boycott of Israel.” 

Although several states acted earlier, Folwell said North Carolina had to follow a procedure ahead of divesting. He noted sponsors of the 2017 legislation were supportive of his office’s procedures. His office reached out to Unilever, Folwell said, without success, before making the final decision to divest. 

When announcing the decision last month, Folwell noted the Oct. 7 atrocities in Israel after the Hamas attack, and said it’s important to be clear antisemitism has no place in North Carolina. But he said that international events didn’t influence the timing of the divestment.

Neither the press offices of Unilever nor Ben & Jerry’s responded to inquiries from FOX Business for this story. 

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In July 2021, Ben & Jerry’s announced it would no longer sell its product to Israelis in the West Bank. Although a subsidiary itself, Ben & Jerry’s maintains its board of directors. 

In June 2022, Unilever sold the Ben & Jerry’s ice cream operations in Israel to attempt to stem the controversy. But the Ben & Jerry’s board was still free to maintain its position on Israel.

“The new business arrangement follows a Unilever review of Ben & Jerry’s in Israel after the brand and its independent Board announced last year its decision to discontinue sales of its ice cream in the West Bank,” Unilever explained in a June 2022 press release.

The parent company said it spent a year listening to perspectives, including from the Israeli government.

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“Unilever rejects completely and repudiates unequivocally any form of discrimination or intolerance. Antisemitism has no place in any society,” the company said in its June 2022 press release. 

“We have never expressed any support for the Boycott Divestment Sanctions (BDS) movement and have no intention of changing that position,” the company continued. 

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