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Inflation in the Houston region picked up in December, but it continued to run well below the national pace. Local consumer prices, as measured by the Consumer Price Index for All Urban Consumers (CPI-U), rose 1.6 percent between December ’24 and December ’25, up from 1.1 percent in August—the last month that local data was published before the government shutdown. Houston’s inflation rate remains more than a full percentage point lower than the U.S. rate of 2.7 percent, which was largely unchanged from November.

At 2.7 percent, U.S. inflation landed in line with economists’ expectations in a recent Wall Street Journal survey. Core inflation, which excludes food and energy, came in at 2.6 percent—below the 2.8 percent forecast by that same group of economists. With inflation still above the Federal Reserve’s 2 percent target, officials have signaled they will likely hold interest rates steady at their upcoming meeting. After recent cuts, officials appear inclined to pause and wait for firmer evidence that price pressures are easing.

Locally, food and apparel prices are climbing faster than the national average. Grocery prices (food at home) and restaurant meals (food away from home) are both rising slightly more quickly here than across the U.S., while clothing and alcoholic beverages are increasing at more than twice the national pace. Offsetting those increases, Houston continues to see slower growth in housing and medical costs, along with declining prices for gasoline and education and communication services.

The next release of CPI data will be on Wednesday, February 11, 2026.

Colin Baker
Manager of Economic Research
[email protected]

Clara Richardson
Research Analyst
[email protected]