U.S headline inflation was muted as expected last month (+0.1% vs. +0.1%e m/m), but there was movement in the closely watched underlying measure.
Core-CPI prices, ex-food and energy, increased a seasonally adjusted +0.3% in December from a month earlier, the largest increase since January 2017.
Digging deeper, the gain in core-prices can be attributed largely to shelter inflation, which had been slowing over the past year but rose +0.4% in December. Besides shelter, the indexes for medical care, used cars and trucks, and new vehicles all contributed to the rise in core prices. The index for prescription drugs, which had weakened earlier this year, rose 1% in December on the back of a 0.6% increase in November.
Note: Shelter accounts for about a third of the overall consumer price index.
U.S Retail sales ends last year on solid footing
U.S retail stores, restaurants and online-shopping platforms closed out December on a strong note.
Data this morning showed that U.S retail and food services sales rose a seasonally adjusted +0.4% in December from the prior month, the fourth straight increase. Ex-autos and gas, sales also rose +0.4% in November.
Total sales in Q4 were up +5.5% from the same period a year earlier. For 2017 as a whole, overall sales rose +4.2% from the prior year, the strongest annual growth in three years.
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