United States: Inflation accelerates in December
January 18, 2017
In December, seasonally-adjusted consumer prices increased 0.3% from the previous month. The result overshot the 0.2% increase in November and was in line with market expectations. Food prices were unchanged from the previous month again in December, while energy prices shot up. Inflation climbed to 2.1% in December from November’s 1.7%, the highest figure since May 2014. Annual average inflation was 1.3% in 2016 (2015: 0.1%).
Core consumer prices, which exclude food and energy prices, increased 0.2% from the previous month, which mirrored November’s result. Core inflation inched up from 2.1% in November to 2.2% in December.
Although the Federal Reserve targets an alternative measure of inflation called the personal consumption expenditures price index, it also follows the core inflation measure closely to judge whether inflationary pressures are increasing in the economy.
Author: Ricardo Aceves, Senior Economist