U.S. consumer prices fell in December by the largest amount in six years, reflecting another big monthly decline in gas prices and providing further evidence of falling inflation pressures.
The Labor Department said Friday that its consumer price index dropped 0.4 percent last month, the biggest one-month drop since December 2008. It was also the second straight monthly decline in prices with both months reflecting big decreases in gas prices, which have been tumbling in recent months because of the global plunge in oil prices.
Core inflation, which excludes volatile food and energy, showed no increase in December, only the second time since 2010 that core prices have not risen.
“There is little inflation pressure in the United States or almost anywhere else for that matter,” said Jennifer Lee, senior economist at BMO Capita Markets.
For all of 2014, overall inflation was up just 0.8 percent, the smallest annual increase since 2008.
Even before the big plunge in oil prices, inflation has been running levels well below the 2 percent that the Federal Reserve sees as an optimal annual increase for prices. That has given the Fed leeway to keep a key interest rate at a record low to boost economic growth.
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