U.S. Consumer Prices Fall for First Time in 9 Months

UPI Top Stories |

The Consumer Price Index dropped in December for the first time in nine months, the U.S. Labor Department said Friday.

The price index for all urban consumers declined 0.1 percent on a seasonal adjusted basis after going unchanged in November, the department said in a report Friday. The decline bucked trends that saw the index rise almost 2 percent over the last year.

The consumer-price index measures what Americans pay for everything, like housing, food, entertainment and travel.

The bureau said the gasoline index fell sharply, 7.5 percent, in December. The decline offset increases in several indexes like those for shelter, food and other energy components. The energy index fell 3.5 percent, along with fuel oil, while the natural gas and electricity indexes jumped.

The food index increased 0.4 percent, the report stated.

A decline in oil prices amid oversupply and slowing global economic growth appears at the moment to keep overall inflation in check. The prices appear to be resulting in lower airline prices due to cheaper fuel.

Indexes for shelter, recreation, medical care, household furnishings and operations all increased in December, while the indexes for used cars and trucks, and motor vehicle insurance all declined.

"Through the volatility, the trend in core [inflation] remains tame, but it is up a little in the past year," Jim O'Sullivan, an economist at High Frequency Economics, told the Wall Street Journal.

Ryan Sweet, a Moody's Analytics economist, said Friday's summary supports a plan by Federal Reserve head Jerome Powell for patience when in comes to increasing interest rates in 2019.

In a presentation last week, Powell said the central bank will be more deliberate in raising rates this year, after four hikes in 2018. The Federal Open Market Committee will meet to decide whether to raise rates or leave them alone.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Comments

Watchlist

Symbol Last Price Change % Change
AAPL

     
AMZN

     
HD

     
JPM

     
IBM

     
BA

     
WMT

     
DIS

     
XOM

     

World Economic Forum at Davos 2019 - Frank Ricotta CEO BurstIQ

Matt Bird sits down with Frank Ricotta, CEO BurstIQ, at the World Economic Forum at Davos 2019