Economic Report: Consumer inflation climbs 0.4% in December on higher gas prices, CPI finds

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The numbers: Prices of consumer goods and services — the cost of living — rose in December at the fastest pace since last summer as Americans paid more to fill up their gas tanks.

The consumer price index advanced 0.4% last month, the government said Wednesday. Economists polled by Dow Jones and The Wall Street Journal, sister publications of MarketWatch, had forecast a 0.4% increase.

About 60% of the increase last month was tied to higher gasoline prices.

If gas and food are excluded, the rate of inflation rose a smaller 0.1%, based on a less volatile “core” measure of prices.

Read: The U.S. lost 140,000 jobs in December. How bad was it?

The pace of inflation over the past year, however, was still quite low at 1.4%. The yearly rate increased from 1.2% in the prior month.

Before the pandemic began last spring, consumer inflation was running at a much higher 2.3% rate.

Also: Restaurants eliminate another 372,000 jobs in December

Read: The bad news keeps coming for the economy, but it might not be as bad as it looks

Big picture: Investors are talking about inflation again, but it’s likely to hover below 2% through the early spring and probably won’t pose a threat to the economy this year.

See: MarketWatch Coronavirus Recovery Tracker

Market reaction: The Dow Jones Industrial Average DJIA, +0.19% and S&P 500 SPX, +0.04% were set to open lower in Wednesday trades.

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