Inflation in the US was quicker than expected in December, data released on Thursday showed.

The headline, all-items gauge rose 0.3% last month from November, as shelter prices kept rising and increases on the electricity and gasoline indexes offset a decline in natural gas prices to push up the energy gauge. Shelter costs were to blame for more than half of the month-to-month uptick on the headline.

Core prices rose an as-expected 0.3% (0.3091% unrounded), but on a YoY basis, the underlying measure was slightly warmer than anticipated, even as it nevertheless printed a three-handle for the first time since May of 2021.

The headline gauge rose 3.4% YoY, ahead of the 3.2% consensus.

The increase on the electricity gauge was the fifth straight. The YoY pace actually slowed in December, though. Grocery prices rose just 0.1% MoM, and the YoY rate there was just 1.3%.

As far as the shelter gauges are concerned, the 12-month pace of gains on the rent indexes is still receding, but the familiar figure below, updated with today’s CPI release and the latest Case-Shiller price data, still looks ominous to me.

Recall that home prices rose on a YoY basis for a fourth straight month in November, and the gains are accelerating.

On the bright side, both of the CPI-derived “supercore” measures (what the Fed’s watching) rose less on a MoM basis in December than they did the prior month. Core services ex-shelter printed 0.406% (down from 0.51%) and core services ex-rent/OER rose 0.403% (down slightly from 0.44%).

Ultimately, the data wasn’t a game changer. And it wasn’t expected to be. The December CPI release certainly didn’t make a strong case for a March rate cut. There’s no urgency.

At the same time, there wasn’t anything in the release that should alarm the Fed. Unless of course you count core inflation still running double target.

Suffice to say no one will alter their narrative based on this release by itself.