EconomyUS inflation falls to 0.8% as crude plummets – Financial Times

The slump in crude oil prices has pushed US inflation to its weakest annual rate since the financial crisis.

The US consumer price index climbed 0.8 per cent in December from a year earlier, as energy costs slid and the average price of gasoline declined by more than $ 1 per gallon, the latest data from the Department of Labor show.

The headline reading, which was a tenth of a point ahead of Wall Street forecasts, was the lowest figure since October 2009.

Excluding more volatile categories including energy and food, the monthly report showed a 1.6 per cent year-on-year rise, below economist expectations.

Investors are closely scrutinising inflation figures as the Federal Reserve readies to begin tightening monetary policy. Lacklustre wage pressures at year’s end and cooling inflation could delay the first rate hike, several economists have argued.

The Fed’s stated measure of inflation is the monthly price inflation measure for personal consumption expenditures, reported by the Commerce Department.

Concerns have mounted in recent months that growth, particularly in key markets in Europe and Asia, is cooling and a report from Eurostat put the inflation rate below zero for the first time since October 2009 in December.