Consumer Prices Rise Slightly
Consumer prices rose 0.1% in December, less than the 0.2% gain expected by the market. Excluding food and energy, prices were also up 0.1%, compared with a consensus of 0.2% for the core rate.
Energy prices fell 0.4%, because the price survey was taken early in the month, before the recent escalation in oil prices. Declines in apparel (-0.5%) and new car prices (-0.4%) offset increases in hospital care (+0.7%).
Overall, there is no sign of inflation. Energy prices will start to rise sharply in the January report. The CPI is up 2.4% from a year earlier; the index is up 1.9% excluding food and energy. The showdown in the core rate is supporting some deflationary fears.
From Standard & Poor's MarketScope
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