The Department of Labor is scheduled to release the Consumer Price Index (CPI) for December on Tuesday. Inflation remains high That remains above the Federal Reserve’s 2% target, despite prolonged disruptions to data collection due to the government shutdown.

Consensus forecasts compiled by FactSet estimate that headline inflation rose 0.3% month-over-month and 2.6% year-over-year in December, while core inflation, which excludes more volatile food and energy prices, rose 0.26% month-over-month and 2.6% year-over-year.

Economists have warned that the 43-day government shutdown that ended in mid-November will not only affect the economy. December CPI You can print out CPI inflation data for the next few months.

“This is going to be a very ambiguous report because there are still questions surrounding the October and November CPI reports,” Greg Daco, chief economist at EY Parthenon, told FOX Business in an interview. “Most of the data was affected by the government shutdown.”

Minutes show that Fed policymakers are sharply divided on the December rate cut, raising doubts about further rate cuts.

Economists have warned that December’s CPI report is expected to be biased downwards due to delays in data collection due to the government shutdown. (Spencer Pratt/Getty Images/Getty Images)

Daco said the company expects headline CPI and core CPI to rise 0.3% month-on-month and 2.7% year-on-year in December, with some pressure on energy and industrials. grocery prices. He said there was an upside risk for inflation to reach 2.8% due to uncertainty surrounding readings over the past few months and delays in data collection.

“In most price categories, we have people physically going into stores and measuring prices. government shutdownthose studies were not conducted,” he explained.

“The BLS essentially decided to use what’s called a carryover method, where prices don’t change over a given month,” Daco said. “Prices change all the time, but that was an approximation used to give a downward bias to the inflation trend.”

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he, housing prices The data from rent and owner’s equivalent rents is the area where the carryover method’s most problematic bias was in housing. The BLS measures home valuations on a six-month rolling basis, which suggests no change in home valuations between April and October.

Additionally, Daco noted that November’s CPI data was collected late in the month, which “coincides with further discounts on some key products.” black friday This may have given the November data itself a downward bias. ”

Daco added that data collection issues with October and November CPI data “indicate a downward bias in inflation through April.”

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Data disruptions due to the government shutdown are expected to impact inflation statistics through April. (Stephanie Keith/Bloomberg via Getty Images/Getty Images)

He added that the downward bias in inflation data through April would be offset to some extent, but “it won’t happen all at once,” and cautioned that “it is very difficult to say how quickly the downward bias implied by late-stage surveys and carryover methodologies will be offset.”

Oxford Economics also predicts that: Overall CPI and Core CPI The index is expected to rise about 0.3% on a monthly basis in December, warning that “shutdown-related distortions will continue to cloud the December CPI signal.”

The company noted that November’s CPI data for apparel and recreational goods was “particularly low” because the data was collected during the holiday discount season.[year-over-year] CPI readings will still be depressed due to housing. ”

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“BLS will continue to publish CPI at artificially low levels heading into December evacuations, and this downward bias will not be corrected until April 2026,” Oxford Economics told FOX Business.