WASHINGTON – Consumer prices nationwide continued to rise last month, though at a slower pace than in November, according to a report today by the U.S. Department of Labor’s Bureau of Labor Statistics. The seasonally adjusted Consumer Price Index for All Urban Consumers (CPI-U) rose 0.3 percent from the month before, after surging 0.8 percent in November.
Analysts had expected the CPI-U to rise only 0.2 percent in December, based on the median forecast from a Bloomberg News survey of 76 economists.
Despite last month’s slowing, 2007 saw the fastest U.S. inflation in 17 years.
Compared with the final month of 2006, the CPI-U rose 4.1 percent to 210.036 points (1982 to 1984 = 100), slowing from a 4.3-percent year-over-year increase in November that was the index’s largest since June 2006.
Food prices rose 4.9 percent over the year, while the energy index rose 17.4 percent.
The core CPI-U rose 2.4 percent compared with December 2006, accelerating from November’s year-over-year gain of 2.3 percent and October’s increase of 2.2 percent. Transportation costs surged 8.3 percent, as gasoline prices rose; medical care rose 5.2 percent; other goods and services, 3.3 percent; housing and education/communication, 3.0 percent; and recreation costs, 0.8 percent, while apparel costs dipped 0.3 percent compared with a year ago.
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Compared with November 2007, the energy index rose 0.9 percent last month – slowing to about one sixth of its 5.9-percent increase the month before, but still accounting for about a third of the CPI-U’s rise last month – as the consumer price index for petroleum-based energy products rose 1.2 percent and the index for energy services rose 0.5 percent.
Food prices rose 0.1 percent, slowing from the 0.3-percent increases of the past two months, in their smallest monthly increase since December 2006.
The core CPI-U excluding food and energy prices rose 0.3 percent in December – matching analyst expectations – after rising 0.3 percent in November.
The increase was led by transportation costs, which rose 0.5 percent over the month as gasoline costs increased 1.1 percent. The cost of housing, medical care, education and communication expenses and other goods and services all rose 0.3 percent last month, while apparel costs rose 0.2 percent, the BLS said. Recreation costs were unchanged from November.
“With the sluggish growth outlook and rising risk of recession, inflation concerns have receded,” Zach Pandl, an economist at Lehman Brothers Holdings Inc. in New York, told Bloomberg News. “The Fed is clearly focusing on growth at this point.”
In the Northeast, the CPI-U rose to 223.425 last month, an increase of less than 0.1 percent from its level in November and 3.8 percent from December 2006.
Meanwhile, American workers’ real average weekly earnings (adjusted for inflation) rose 0.1 percent in December, compared with their November level, after falling 0.4 percent the month before, the BLS said in a separate report today.
Average hourly earnings increased last month by 0.4 percent, slowing from November’s 0.5-percent increase. That gain more than offset the rise in the cost of living, as the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased by 0.3 percent in December after rising 0.9 percent the month before.
Average weekly hours were unchanged for the fifth consecutive month.
Compared with December 2006, real earnings shrank by 0.9 percent. But before deflation by the CPI-W, average weekly earnings rose 3.4 percent – to $605.96, from $578.67 a year earlier.
Additional information, including the 24-page Consumer Price Indexes report, is available from the U.S. Department of Labor’s Bureau of Labor Statistics at www.bls.gov/cpi; the five-page Real Earnings report can be found at www.bls.gov/ces.
