U.S. Consumer Prices Rise In Line With Estimates In December
January 13 2021 - 3:38AM
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Reflecting a spike in gasoline prices, the Labor Department
released a report on Wednesday showing U.S. consumer prices
increased in line with economist estimates in the month of
December.
The report said the consumer price index rose by 0.4 percent in
December after edging up by 0.2 percent in November. The price
growth matched expectations.
The Labor Department said the advance by the consumer price
index was driven by an 8.4 percent jump in gasoline prices, which
accounted for more than 60 percent of the overall increase.
The other components of the energy index were mixed, resulting
in an increase of 4.0 percent for the month.
Food prices also rose by 0.4 percent in December, as both the
food at home and the food away from home indexes increased by 0.4
percent.
Excluding food and energy prices, the core consumer price index
inched up by 0.1 percent in December after rising by 0.2 percent in
November. The uptick in core prices also matched economist
estimates.
The modest increase in core prices reflected higher prices for
apparel, motor vehicle insurance, new vehicles, personal care, and
household furnishings and operations.
Meanwhile, the Labor Department said prices for used cars and
trucks, recreation, and medical care were among those to decline
over the month.
The report said consumer prices in December were up by 1.4
percent compared to the same month a year ago, reflecting an
acceleration from the 1.2 percent growth seen in November.
The annual rate of growth by core consumer prices in December
was unchanged from the previous month at 1.6 percent.
"The benign core inflation readings support our call that the
Fed does not lift the policy rate from the effective lower bound
until 2024 and begin QE tapering until 2023," said Kathy
Bostjancic, Chief U.S. Financial Economist at Oxford Economics.
Bostjancic added, "Although additional fiscal stimulus could
bring the tightening forward by a year."
On Friday, the Labor Department is scheduled to release a
separate report on producer price inflation in the month of
December.
Producer prices are expected to increase by 0.3 percent in
December after inching up by 0.1 percent in November, while core
producer prices are expected to rise by 0.2 percent after edging up
by 0.1 percent.
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