Inflation Ticks Up in December

The U.S. Bureau of Labor Statistics reported a slight increase in inflation for December 2024.

The Consumer Price Index for All Urban Consumers (CPI-U) rose by 0.4% in December, following a 0.3% increase in November.

ConstructConnect Chief Economist Michael Guckes said, “Overall inflation has been persistent between 2.44% and 3.5% in 2024, and well above the Federal Reserve’s 2% target.”

“This persistence has already caused the Fed to pause further rate increases and could lead to higher interest rates for leveraged firms,” he said.

Guckes added, “In general, construction material costs were not the primary cost driver of construction inflation during the past year but average hourly construction wages, which hit $38.95 in December, a 4.4% annual increase. “

The economist noted that in 2024, construction wages grew at or above 4% for the fourth year in a row based on the average hourly wage rate.

Select Highlights of the December Inflation Report

Energy costs, which impact many aspects of construction, saw a significant rise:

• The energy index increased by 2.6% 
• Gasoline prices jumped 4.4%
• Natural gas prices rose 2.4%

Electricity prices rose modestly by 0.3%

Food prices also increased by 0.3%, affecting both groceries and dining out

Select Annual Inflation Trends for 2024 (not seasonally adjusted)

• Core inflation (excluding food and energy) rose 3.2%
• Food prices climbed 2.5%
• Energy costs decreased 0.5%

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