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Reuters
WASHINGTON
US 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 healthcare costs rose steadily.
Overall, the report from the Labor Department on 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. The CPI 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, advancing 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 readings were in line with economists’ expectations. The CPI rose 1.9 percent in 2018, slowing from a 2.1 percent increase in 2017. The core CPI increased 2.2 percent in 2018, up from 1.8 percent in 2017.
The Fed, which has a 2 percent inflation target, tracks a different measure, the core personal consumption expenditures (PCE) price index, for monetary policy.
WASHINGTON
US 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 healthcare costs rose steadily.
Overall, the report from the Labor Department on 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. The CPI 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, advancing 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 readings were in line with economists’ expectations. The CPI rose 1.9 percent in 2018, slowing from a 2.1 percent increase in 2017. The core CPI increased 2.2 percent in 2018, up from 1.8 percent in 2017.
The Fed, which has a 2 percent inflation target, tracks a different measure, the core personal consumption expenditures (PCE) price index, for monetary policy.
