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Grocery prices helped boost the Consumer Price Index (CPI) in December, which rose 0.4% from November and 2.9% annually, the Bureau of Labor Statistics reported this week. Retail sales also increased 0.4% in December to $729.2 billion, and 3.9% year over year, the Commerce Department reported on Thursday.
The Commerce Department also revised November’s retail sales bump from 0.7% to 0.8%.
While the CPI jump was higher than analysts anticipated, following a 0.3% monthly and 2.7% annual increase in November, core CPI, which excludes food and energy prices, was lower than expected, up 0.2% month over month, the first cooldown since June, and 3.2% annually. Retail sales fell slightly below analysts expectations.
Retail sales: The largest bump came to miscellaneous store retailers, up 4.3% for the month. Clothing and clothing accessories store sales jumped 1.5%, while food and beverage store sales rose 0.8% from November. Sporting goods, hobby, musical instrument, and book stores saw a 2.6% sales boost. General merchandise stores got a 0.3% sales increase, with department stores nearly flat at 0.1% and down 1.8% year over year—in line with Macy’s issuing a lower-than-expected holiday sales forecast this week. Health and personal care stores were among few segments that saw a monthly sales dip, at 0.2%.
CPI: Both food at home (up 1.8% year over year) and food away from home (up 3.6% year over year) rose 0.3% month over month. Four of the top six grocery indexes saw a jump in December: meat, poultry, fish, and eggs (0.6%, with eggs up 3.2% due to an ongoing avian flu-driven egg shortage); cereals and bakery products (1.2%, reversing a 1.1% drop in November); dairy and related products (0.2%), and other food at home (0.3%). CPI dropped for fruits and vegetables (0.1%) and nonalcoholic beverages (0.4%), along with alcoholic beverages (0.3%).
Across other retail categories: Apparel was up 0.1% month over month and 1.2% annually, while personal care products dipped 1.1% from November, but rose 0.5% year over year.
Major CPGs could be changing course on price hikes in 2025, following continued boosts last year, as a Deloitte report released last week revealed over half of CPG executives believe they can’t rely on price tag bumps to drive revenue growth this year.