December CPI data revealed that consumer prices were higher than expected, with shelter prices accounting for more than half of the price increases. Food inflation rose, with groceries up 1.3% year-over-year and food at restaurants up 5.2% over the same time period. Meanwhile, used vehicles prices decreased year-over-year by 1.3%. Yahoo Finance's Josh Schafer, Pras Subramanian, and Brooke DiPalma break down the latest with the report and give insight into impact of these numbers.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Nicholas Jacobino

Video Transcript

BRAD SMITH: December CPI reports showed prices were higher than expected. We saw prices rise 3.4% year-over-year compared to 3.2%. That was the expectation. And 3.1% was last month's reading. The energy index driving a lot of those gains. Also, that volatile core inflation that excludes food and energy came in at 3.9% year-over-year. We've got you covered with the three biggest takeaways from the report, housing, food, and car prices. Josh Schafer, Pras Subramanian, and Brooke DiPalma are standing by. Hey, Josh. Shelter still the lead gainer in that CPI print.

JOSH SCHAFER: Yeah, Brad. So shelter accounting for more than half of the price increases that we saw in December. That's according to the Bureau of Labor Statistics. So I want to give you those numbers here and run through them for what we saw in December. Shelter inflation.

When you take a look at that shelter inflation, you're looking at rent month-over-month increasing 0.4%, year-over-year increasing 6.5%. And then when you look at homeowners rent equivalent, that went up 0.5% month-over-month and 6.3% year-over-year. Really not much of a decline from the price increases that we saw in November.

We know overall, housing has been a key part of this story and is one of the main things that's still holding up inflation and providing significant upside risk to inflation. Now, of course, economists would point to some of this data in the BLS is a little bit lagging, and there's other rent inflation data that you could look to that says the grass might be greener on the other side in the long term.

But for today, this is the report that we have. And the shelter index is contributing a significant amount to that hotter-than-expected number, which for now, markets don't seem to love. Of course, we're always wondering what that could mean for more Fed rate hikes. Pras Subramanian, though, is standing by in the newsroom with more on auto prices. Pras, what do you got for us?