U.S. Consumer Price Inflation

The U.S. consumer price inflation fell to 1.9% on year-on-year basis in Dec 2018 in line with market expectations, mainly due to a sharp decline in energy prices. The consumer prices for energy fell to 0.3% over the past 12 months. Among the energy commodities, gasoline declined sharply 2.1% over the last year, whereas electricity and natural gas prices have increased 1.1% and 2.3% respectively. However, pressure on the core consumer price that excludes volatile food and energy prices remained firm as rental housing and healthcare costs rose steadily. The core inflation increased 2.2% in Dec 2018 compared to a year ago. This is slightly higher than the 2% long term target of the Federal Reserve, the US central bank.