WASHINGTON, D.C. — Today, the Bureau of Labor Statistics announced that inflation, as measured by the consumer price index (CPI) on all items, increased by 2.7% for the 12 months ending in December, holding steady from November and below economists’ expectations.
December data confirm the annualized rate of inflation is below the year-earlier pace, showing that prices are right on track—trending downward.
Core inflation, which excludes volatile energy and food prices, also remained steady, increasing at a pace of 2.6% year over year in December after increasing by 2.6% in November.
Prices for everyday Americans continue to fall. Over the last two months, prices for toys, natural gas, and car and truck rentals all declined as average gas prices continued to decrease to multi-year lows.
Gas prices have hit their lowest levels since 2021, with the national average declining for the seventh straight week. According to GasBuddy, the average price for regular gas is below $3 per gallon in 43 states, below $2.75 per gallon in 30 states, and at or below $2.50 per gallon in 17 states. Americans can purchase gas below $2 per gallon at certain stations in at least 19 states.
GasBuddy estimates motorists are on track to spend $11 billion less on gas in 2026 compared to 2025, with the average household saving $600 annually and overall gas spending as a share of disposable income reaching the lowest in two decades.
Wage growth remains strong under President Trump’s second term. Private sector workers have seen their wages rise 3.8% over the past 12 months as workers earn back the purchasing power lost under the Biden administration. Private sector workers are on track to see a real wage gain of $1,100 in President Trump’s first full year in office—resoundingly beating inflation.
Carrie Sheffield, senior policy analyst for Independent Women’s Center for Economic Opportunity, issued the following statement:
“America continues to enjoy a robust economy, including easing inflation, thanks to President Trump’s leadership to improve affordability for America’s families.
“Since President Trump took office, headline inflation has averaged just 2.4%, much lower than the 3% annual rate inherited from former President Biden. Core inflation has been running at 2.4%, far below the 3.3% annual rate inherited from Biden.
“The latest inflation data shattered economists’ expectations once again, as gas, mortgage and rent prices hit multi-year lows.
“Additionally, President Trump and conservative members of Congress last year passed tax cuts and other reforms in the Working Families Tax Cuts, which will improve wage growth and ensure families keep more of their hard-earned money.
“We look forward to seeing these efforts bear fruit and continue to ease inflation for American families in the months ahead.”
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