US Inflation Rate at 12-Month High

Consumer prices in the United States increased 0.7 percent year-on-year in December of 2015, higher than 0.5 percent in the previous month but below market expectations of 0.8 percent.

Year-on-year, upward pressure came from prices of services less energy (2.9 percent, the same as in November), namely shelter (3.2 percent, the same as in November), medical care (2.9 percent from 2.5 percent in November) and transportation services (2.6 percent from 2.3 percent in November). Food inflation slowed to 0.8 percent from 1.3 percent in November. In contrast, energy cost fell 12.6 percent, lower than a 14.7 percent drop in the previous month.

Annual core inflation which excludes food and energy accelerated to 2.1 percent, the highest since July of 2012.

On a monthly basis, consumer prices edged down 0.1 percent as cost of energy and food declined for the second month in a row. The energy index fell 2.4 percent as all major component energy indexes declined. The food index fell 0.2 percent as the index for food at home decreased 0.5 percent, led by a sharp decline in the index for meats, poultry, fish, and eggs.  

Excluding food and energy, prices rose 0.1 percent in December, its smallest increase since August. The index for shelter continued to rise and the indexes for medical care, household furnishings and operations, motor vehicle insurance, education, used cars and trucks, and tobacco also increased in December. However, a number of indexes declined, including those for apparel, airline fares, personal care, new vehicles, and communication.

US Inflation Rate at 12-Month High

BLS | Joana Taborda |
1/20/2016 1:51:16 PM