The US PCE price index rose 0.4% month-over-month in December 2025, following a 0.2% increase in November, the most since February and above market expectations of 0.3%. Prices for goods were up 0.4%, accelerating from 0.1% in November while prices of services rose at a faster 0.3%, compared with 0.2% in November. Core PCE, which excludes food and energy, increased 0.4%, also above forecasts of 0.3%. Separately, prices for food rose 0.4% and cost for energy goods and services went up 0.2%, easing from a 1.7% rise. On an annual basis, headline PCE inflation accelerated to 2.9% from 2.8%, above forecasts of 2.8%. Core PCE inflation also edged up to 3% from 2.8% in November and above expectations of 2.9%. The PCE index remains the Federal Reserve’s preferred inflation gauge.