U.S. consumer prices see first fall in months
WASHINGTON: U.S. consumer prices fell for the first time in nine months in December amid a plunge in gasoline prices, but underlying inflation pressures remained firm as rental housing and health care costs rose steadily.
Overall, the report from the Labor Department Friday pointed to moderate inflation, which could support recent statements by Federal Reserve officials for caution about raising interest rates this year.
“The Fed will take this as further proof that price pressures are building more slowly than some have feared based on the strong growth of late and tight labor market,” said James McCann, senior global economist at Aberdeen Standard Investments. “It certainly seems to justify the Fed’s message about being more patient on rate increases.”
The Consumer Price Index dipped 0.1 percent last month, the first drop and weakest reading since March. It was unchanged in November. In the 12 months through December, the CPI rose 1.9 percent after increasing 2.2 percent in November.
Excluding the volatile food and energy components, the CPI increased 0.2 percent, up by the same margin for a third straight month. In the 12 months through December, the so-called core CPI rose 2.2 percent, matching November’s increase.
December’s inflation results were in line with expectations. –