The Consumer Price Index remained unchanged in December, according to the latest Bureau of Labor Statistics' reports on the consumer price, US import/export price and producer price indexes. This is the third month in a row without an increase in the index, bringing the three-month annualized rate of headline inflation to -0.4 percent. Much of the variation in inflation rates can normally be attributed to food and energy prices, and recent history is no exception. Energy prices fell 1.3 percent in December and fell at an 18 percent annualized rate since September, compared with a 26.6 percent rate increase over the three months prior.
The real hourly wage for production and nonsupervisory employees once again was flat in December. Though this may be in small part due to the creation of a few low-paying jobs, the low rate of wage growth will also help keep low the rate of inflation and make it difficult for consumers to repay their debts. In all, this report once again indicates that a high rate of inflation is far removed as a threat to the economy.
For a more in-depth analysis, read the latest Prices Byte.