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Fuel, food prices send US inflation to 14-month high in December

Gasoline prices per gallon (3.8 liters) in Los Angeles in October 2019
Gasoline prices per gallon (3.8 liters) in Los Angeles in October 2019 GETTY IMAGES NORTH AMERICA/AFP
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Washington (AFP)

Mounting food and fuel prices helped send US consumer inflation to a 14-month high in December while price pressures otherwise were steady, government data showed Tuesday.

The latest figures seemed unlikely to be of concern to policymakers at the US Federal Reserve, who have said since the end of 2019 that they expect to keep interest rates steady for the near future.

Compared to November, the Consumer Price Index, which tracks costs for household goods and services, matched economists' expectations, rising 0.2 percent for the month on higher prices for gasoline, shelter and medical care.

Outside the volatile food and fuel categories, the "core" index rose a slower 0.1 percent, just shy of forecasts.

Compared to December of last year, however, CPI jumped to 2.3 percent, its hottest pace since October of 2018, continuing a steady upward march since September of last year.

Gasoline prices likewise jumped 7.9 percent, the most since October of 2018. Prices for food also ticked higher, with restaurant bills and groceries including dairy and baked goods all edging higher.

The year-on-year "core" index, however, held steady at 2.3 percent for the third month in a row. Prices for shelter and medical care rose while costs for used cars and clothing fell.

Ian Shepherdson of Pantheon Macroeconomics said the result was "ignorable," and showed that for now at least "core inflation is under control."

"It's not low enough to suggest that the Fed needs to ease but it's a long way from suggesting they need to tighten," he wrote in a client note.

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