US inflation slows as energy costs stabilise
( dpa )- US consumer prices slowed their rise in December as a spike in energy prices levelled off, the government said Wednesday, signalling that inflation may be easing.
Consumer prices rose 0.3 per cent on the month after surging 0.8 per cent in November. The year ended with the annual inflation rate at 4.1 per cent, the highest for December since 1990, but down from 4.3 per cent in November, the US Labour Department said.
Energy prices were up 0.9 per cent in December after jumping a total of 7.1 per cent over the previous two months. Despite headline-grabbing record oil prices, the average rise in US energy prices in 2007 was the lowest since 2002, Labour Department data showed.
Despite a sharp rise in food prices, the average inflation rate for all of 2007 slowed to 2.8 per cent, the lowest since 2004 and down from 3.2 per cent in 2006, the report said.
A key reason was the slowdown in US housing prices as the nation's real-estate bubble burst.
Meanwhile, food prices surged 4.9 per cent in 2007, the most since 1990. Experts link the trend to the ethanol boom, which has driven up corn prices and led US farmers to shift production from feed and food toward fuel.
Still, the latest data should make it easier for the Federal Reserve to slash US interest rates at its January 29-30 policy meeting.
So-called core inflation, a Fed benchmark that excludes volatile food and energy prices, backed off a November spike and returned last month to 0.2 per cent, its level from June to October.