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Consumer Prices Tumble In December
REUTERS/Mark Blinch An inflatable Santa Claus decoration.
Consumer prices collapsed in December.
According to the December consumer price index from the BLS, prices fell 0.4% in December, the biggest monthly decline since December 2008.
Compared to last year, prices rose 0.8%, more than the expected 0.7% increase.
"Core" inflation, which strips out food and energy prices, which tend to be more volatile, were flat compared to last month and 1.6% against the prior year.
"Core" inflation was expected to edge up 0.1% over last month and rise 1.7% when compared to the prior year.
The decline in gas prices was largely responsible for the drop in prices, with the gasoline index falling 9.4% in December and the energy index dropping 9.1%, its largest monthly decline since December 2008.
The shelter index, meanwhile, continued to rise, climbing 0.2% over November and 2.9% against last year in December, while the medical care index rose by the most since August 2013.
Following the report, Ian Shepherdson at Pantheon Macro said the "core" reading was depressed by airline fares, which fell 5% in December, and Shepherdson added that these have "much further to fall."
Here's the CPI breakdown from the BLS.
BLS
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