US inflation slowed sharply in 2012 compared to the previous year and consumer prices remained subdued in December, the latest data from the US government reveals.
US inflation climbed 1.7% in 2012. That is nearly half of the 3.0% level logged in the previous year and the third lowest rate in the last 10 years.
For the year, American consumers paid 1.7% more for gasoline compared to the 9.9% jump in 2011. Food prices went up 1.8%, but again, that was much tamer than the 4.7% increase in 2011.
Stripping out volatile food and energy prices, the so-called core US Inflation rate in 2012 advanced 1.9%. This is the key reading watched closely by the Federal Reserve as it helps decide where the central bank sets its benchmark interest rate. The level is a tad below the Fed’s 2% inflation target.
"All things considered, inflation remains well in check, providing a bit of relief for consumers, while providing ample leeway for the Federal Reserve to keep its foot to the floor on monetary policy," CNNMoney quoted Jim Baird, partner and chief investment strategist for Plante Moran Financial Advisors.
Consumer prices were flat in December after falling 0.3 percent in November. Increases in areas like food, rent and transportation balanced out with prices at the pump down 2.3%. It was the third monthly decline in a row for gasoline after prices soared 9% in August and 7% in September.
"The gasoline index declined again in December, but other indexes, notably food and shelter, increased, resulting in the seasonally adjusted all items index being unchanged," the US Labor Department indicated Thursday, Jan. 16, 2013 in its monthly Consumer Price Index (CPI) report.
"Gasoline was the only major energy index to decline; the indexes for natural gas and electricity both increased. Within the food category, five of the six major grocery store food groups increased as the food at home index rose for the third consecutive month."
Core US inflation picked up 0.1 percent in December, matching increases in five of the last six months.
US Labor Department monthly inflation data from June through December and for 2012 follow.
June – December 2012 Consumer Prices – Gains in Percent
|June 2012||July 2012||Aug 2012||Sept 2012||Oct 2012||Nov 2012||Dec 2012||12
|Food at home||0.1||.0||0.1||.0||0.3||0.3||0.2||1.3|
|Food away from home||0.2||0.2||0.3||0.2||0.1||0.1||0.1||2.5|
|Gasoline (all types)||-2.0||0.3||9.0||7.0||-0.6||-7.4||-2.3||1.7|
|Utility (piped) gas service||1.7||-0.2||2.8||2.0||-0.2||1.3||1.3||-2.9|
|All items less food, energy||0.2||0.1||0.1||0.1||0.2||0.1||0.1||1.9|
|Comm. less food, energy||0.2||.0||-0.2||-0.2||-0.1||-0.1||-0.2||0.3|
|Used cars and trucks||.0||-0.5||-0.9||-1.4||-0.9||-0.5||-0.4||-2.0|
|Services less energy||0.2||0.1||0.1||0.3||0.3||0.2||0.2||2.5|
The US Labor Department’s next release of Consumer Price Index data for January 2013 happens on February 21, 2013 at 8:30 AM ET. The CPI is the core data used for this site’s Inflation Calculator.