In December, consumer prices increased due to a jump in energy prices. However, inflationary pressures remained weak as the economy is struggling amid the COVID-19 pandemic.
The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 0.4% in December on a seasonally adjusted basis, faster than a 0.2% increase in November. Excluding the volatile food and energy components, “core” CPI rose by 0.1% in December, following an increase of 0.2% in November. The indexes for apparel (1.4%), motor vehicle insurance (1.4%), new vehicles (0.4%), personal care (0.4%), and household furnishings and operations (0.2%) all rose in December, while the indexes for used cars and trucks (-1.2%), recreation (-0.3%), and medical care (0.2%) declined over the month.
In December, the price index for a broad set of energy sources rose by 4.0%, after an increase of 0.4% in November. It was the seventh straight increase in energy prices following five consecutive declines at the beginning of 2020, from January to May. The food index rose by 0.4% in December, after a 0.1% decrease in November. The index for food at home increased by 0.4% in December, as did the index for food away from home.
During the past twelve months, on a not seasonally adjusted basis, the CPI rose by 1.4% in December, faster than a 1.2% increase in November. Meanwhile, the “core” CPI increased by 1.6% over the past twelve months, the same increase as in November. The food index rose by 3.9% and the energy index declined by 7.0% over the past twelve months.
BLS data collection in December was again affected by the COVID-19 pandemic. BLS mentioned in the today’s news release that many indexes are based on smaller amounts of collected prices than usual, and a small number of indexes that are normally published were not published this month.