WASHINGTON – The United States’ consumer price index grew by 0.1 percent in December relative to the previous month and the inflation rate for all of 2017 came in at 2.1 percent, the Labor Department reported on Friday.
The monthly rise in the CPI matched economists’ forecasts, while the annual growth in consumer prices was in line with the US Federal Reserve’s annual inflation target of 2 percent.
The slight rise in the CPI in December was driven mainly by higher shelter and food costs, which rose 0.4 percent and 0.2 percent, respectively.
But energy prices fell 1.2 percent in December due mainly to a 2.7 percent decline in the cost of gasoline relative to November.
Core inflation, which excludes volatile food and energy prices, rose by 0.3% in December from the prior month – its biggest monthly gain in 11 months – and by 1.8 percent compared to December 2016.
After coming in below the Fed’s target for years, US inflation appears to have rebounded in the US.
Rising consumer prices provide further support for central bank policymakers’ median expectation of three increases this year in the Fed’s benchmark interest rate, which currently is at a range of between 1.25 percent and 1.5 percent.