U.S. Inflation Supports Fed's Promise of Patience

11 Jan 2019

U.S. Inflation Supports Fed's Promise of Patience

U.S. consumer prices rose in December on an annualized basis, according to data released on Friday.

The Labor Department said its consumer price index decreased 0.1% last month. In the 12 months through December, the CPI rose 1.9%.

Both readings were in line with consensus.

The so-called core CPI increased by 0.2% from a month earlier and rose 2.2% in the 12 months through December.

Those readings also matched economists’ forecast.

Core CPI is a key gauge of underlying consumer price pressures that excludes food and energy costs.

Core prices are also viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure precisely because they exclude the volatile food and energy categories. The central bank usually tries to aim for 2% core inflation or less.

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