WASHINGTON – U.S. consumer prices jumped at the sharpest rate in eight months during December, climbing 0.5 percent as prices for energy products shot up after three straight months of declines, the Labor Department said on Thursday.
Last month's gain in the Consumer Price Index was the first increase since August and followed a flat November. The December rise was the sharpest since a 0.6 percent increase last April.
Wall Street analysts had forecast that overall consumer prices would rise by 0.4 percent.
So-called core consumer prices, excluding food and energy costs, increased 0.2 percent in December after being unchanged in November. The rise in core prices was in line with forecasts.
Federal Reserve officials have said they remain wary about the potential for inflation to flare up, though expectations for price rises have been relatively well contained. The Fed is expected to keep U.S. interest rates on hold when its policy-setting committee meets later this month on Jan. 30-31.
For the full year 2006, the consumer price index increased by 2.5 percent , an improvement over 2005 when it was up 3.4 percent.
In December, energy prices shot up by 4.6 percent after a 0.2 percent fall in November and much larger decreases in September and October. Some of the increases in energy prices have likely eased since as world oil prices have come down.
The December increase in energy prices was the biggest in 11 months, since a 5.0 percent price acceleration last January, the department said.