WASHINGTON: Consumer prices rose in December by the most since June, driven up by higher gas prices. However, excluding prices in energy products, inflation was tame.
The Labor Department said Thursday that the consumer price index rose a seasonally adjusted 0.3 percent in December, after a flat reading the previous month.
For the year, prices increased 1.5 percent in 2013, down from 1.7 percent in 2012. That’s below the Federal Reserve’s target of 2 percent. Fed officials have said in recent months that they are watching the inflation data closely to ensure it does not fall too far.
“The price data continue to deliver the same message: no signs of inflation pressures in the U.S. economy,” said Laura Rosner, an economist at BNP Paribas.
Gas prices jumped 3.1 percent in December, the biggest gain since June. Food prices ticked up 0.1 percent, pushed up by higher restaurant costs. Grocery prices were flat, held down by the biggest drop in fruit and vegetable prices in five years.
Excluding the volatile food and energy categories, core prices increased just 0.1 percent in December. Car prices were flat and airline fares plummeted 4.7 percent, the most in 14 years. Those declines were offset by a big increase in clothing costs, which followed three months of decreases, and rents also rose.
Core prices increased 1.7 percent in 2013, down from a 1.9 percent increase in 2012.
Inflation has been held back in recent years by sluggish growth and high unemployment, which makes it harder for retailers and other businesses to raise prices.