The Labor Department said on Friday its Consumer Price Index rose 0.1 percent last month on modest gains in food and energy costs, after rising 0.4 percent in November. Analysts polled by Reuters had forecast consumer prices rising 0.2 percent in December.
US stock index futures cut losses on the consumer inflation data, while prices for long-dated US Treasuries extended gains on views it would encourage the Fed to keep rates low. The dollar was steady. “CPI does not appear to be flashing significant inflationary pressure ... and the Fed has nothing to worry about for now,” said Michael Woolfolk, senior currency strategist at Bank of New York Mellon in New York.
Price rises in December slowed as gasoline prices increased 0.2 percent after surging 6.4 percent in November. Compared to December 2008, prices rose 2.7 percent, the largest gain since 2007, the department said. Excess slack in both the industrial sector and the labor market are keeping inflation pressures muted. The Federal Reserve has promised to keep overnight lending rates near zero for an extended period of time to help the economy recover from its worst recession in 70 years.
