Published: Fri, January 12, 2018
Money | By Armando Alvarado

US Consumer Prices Inch Up 0.1% In December, Less Than Expected

US Consumer Prices Inch Up 0.1% In December, Less Than Expected

Friday, the U.S. Consumer Price Index rose 0.1% in December, after increasing 0.4% in November, the U.S. Labor Department said.

Reflecting a sharp pullback in energy prices, the Labor Department released a report on Friday showing USA consumer prices rose by less than expected in the month of December.

Analysts polled by Reuters had predicted December's consumer inflation rate would climb to 5.10 percent, the highest since July 2016, from 4.88 percent in November.

At the same time, the central bank's preferred gauge of inflation - a separate figure based on consumer purchases and issued by the Commerce Department - has mostly missed its 2% goal in the past five years.

Rising inflation amid firm global crude oil prices is a major worry for Prime Minister Narendra Modi ahead of his last full-year budget, due on February 1, as he hopes to win a second term in 2019.

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Weak import and producer price reports this week had raised concerns about the inflation outlook, although the two reports do not have a strong correlation with the CPI data. Economists were expecting to see a 0.2% rise in price pressures.

According to data released by Central Statistics Office (CSO), the inflation rate for the last month was mainly driven by steep hike in food and fuel prices. The overall 2.1 per cent price increase was identical to the inflation gain in 2016 with both years up from tiny increases of 0.8 per cent in 2014 and 0.7 per cent in 2015.

Along with the shelter index, the indexes for medical care, used cars and trucks, new vehicles, and motor vehicle insurance also increased in December.

But clothing prices fell for the fourth consecutive month, and airline fares fell 0.5% after a 2.4% drop in November.

The producer price index for final demand edged down by 0.1% in December after climbing by 0.4% in November. Retail sales rose 5.4% from a year ago.

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