US consumer prices up 0.1% in December

| January 18, 2010 | 0 Comments

Official data has revealed that US consumer prices rose by a slower-than-expected 0.1% in December after a rise of 0.4% the previous month.

On an annual basis, prices were up 2.7%, following a gain of 0.1% in 2008 and a 4.1% rise in 2007.

The 2009 increase was the result of higher gas prices, which grew 53.5% over the last year after falling 43.1% in 2008.

In the meantime, food prices fell 0.5% in 2009 after rising 5.9% in 2008. The fall represented the first December-to-December fall in almost 50 years.

Commenting on the figures, Mark Vitner, an economists at Wells Fargo Securities, said: “Core inflation was held down by housing prices. That’s likely to continue because housing is in over supply.

“The overall and core CPI were both well behaved in December, but despite the modest monthly gains, there are some “trouble spots beneath the surface,” he cautioned.

“After falling through much of 2009, food prices have begun to trend higher. Energy prices are also up on year-to-year basis and will no longer constrain inflation,” he concluded.

In related news, it emerged last week that retail sales fell in December in the US. The Commerce Department said sales declined by 0.3% in December compared with the previous month, with total sales for 2009 6.2% lower compared with 2008.

The figures came as a surprise to economists, who had been expecting an increase of 0.5%.

The US emerged from recession in the third quarter but experts have warned that it faces a slow recovery.

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