Published: Fri, January 12, 2018
Finance | By Loren Pratt

Inflation watch: December consumer prices up just 0.1 pct

Inflation watch: December consumer prices up just 0.1 pct

Core inflation, while not the Federal Reserve's preferred inflation measure is still well below the central bank's target of 2%.

Retail inflation for the month of December 2017 stood at 5.21 percent, up from 4.88 percent in November, while the general index for the month of November 2017 stood at 125.6, which is 8.4 percent higher as compared to the level in the month of November 2016.

Factory output growth in October was at 2.2% while CPI was at 5.2 per cent from 4.88 per cent a month ago.

The reason behind the high retail inflation is rise in prices of food items, egg, and vegetables. The U.S. central bank hiked borrowing costs three times in 2017. It raised rates three times previous year.

The CPI inflation, which has been rising for two consecutive month in November, was also higher than market expectations for the third time. Core CPI increased 1.8 percent in the 12 months through December, picking up from 1.7 percent in November.

Last month, gasoline prices fell 2.7 percent after rebounding 7.3 percent in November.

The cost of medical care increased 0.3 percent, with prices for prescription medication surging 1.0 percent after rising 0.6 percent in November.

Prices of medical care rose 0.3%, as the index for prescription drugs advanced 1%.

Despite the stronger than expected monthly core increase, annual inflation remains relatively muted, increasing 1.8% in December, up from 1.7% in November.

A separate Commerce Department report on Friday showed US retail sales rose in December and November's gain was revised upward, indicating a robust holiday-shopping season.

Excluding automobiles, gasoline, building materials and food services, retail sales increased 0.3 percent last month after an upwardly revised 1.4 percent surge in November.

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