United States: Inflation inches down in December
January 15, 2013
In December, consumer prices were unchanged over the previous month in seasonally adjusted terms. The flat reading followed the 0.3% price drop recorded in November but was in line with market expectations. The reading reflects lower gasoline prices, which were offset by increases across the board, in particular for food and shelter.
Building on the subdued monthly figure, annual headline inflation inched down from 2.2% in November to 2.1% in December. Meanwhile, the closely monitored core inflation index - which excludes food and energy - added 0.1% over the previous month, which mirrored November's reading and matched market expectations. As a result, annual core inflation remained unchanged at 1.9%.
Overall, in 2012 inflation averaged 2.1%, which came in well below the 3.2% rise recorded in 2011.The Federal Reserve expects PCE inflation (based on the price index for personal consumption expenditures) to average between 1.3% and 2.0% in 2013. For 2014, the Fed anticipates PCE inflation to range between 1.5% and 2.0%.