Consumer prices increased 2.6% in December from a year earlier, driven by a jump in gas prices. Core prices, excluding food and energy, rose 2.8% year-on-year, signaling a potential slowdown in inflation.
WASHINGTON — An inflation gauge closely watched by the Federal Reserve rose slightly last month, while some underlying prices pressures showed signs of easing. from the Commerce Department showed that consumer prices rose 2.6% in December from a year earlier, up from a 2.4% annual pace in November and the third straight increase. Excluding the volatile food and energy categories, core prices increased 2.8% compared with a year ago, the same as in November and October.
Many businesses raise prices at the start of the year, which could push up inflation a bit when January’s figures are released next month. But the Fed’s preferred gauge should decline steadily in the next few months, economists say, as higher inflation readings early last year fall out of the year-over-year figures.
The Commerce Department’s report also showed consumer spending rose a healthy 0.7% in December from the previous month, fueled in part by steady wage gains and higher stock prices and home values. Incomes rose 0.4%, the government said. With spending outpacing incomes, the savings rate fell to 3.8% from 4.1%.
INFLATION FEDERAL RESERVE CONSUMER PRICES CORE PRICES ECONOMY
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