Reply #25: CPI and Core CPI info (did they start taking energy into the formula?) [View All]

[UpInArms]

CPI sinks 0.1% on falling energy prices
Core CPI rises 0.2% as expected in December

http://www.marketwatch.com/news/story.asp?guid=%7B619D2167%2D7AFD%2D49B9%2D989F%2DD19B017AD531%7D&symbol=&siteid=mktw

WASHINGTON (MarketWatch) - U.S. consumer prices fell a surprising 0.1% in December as energy prices continued to drop off from the spike in September, the Labor Department reported Wednesday.

It was the second straight decline in the consumer price index, which fell 0.6% in November.

Core prices - which exclude food and energy prices - rose 0.2%, as expected, for the third month in a row.

Economists were expecting the CPI to rise 0.2% in December, according to a survey conducted by MarketWatch.

For all of 2005, the CPI increased 3.4%, not much different than the 3.3% increase in 2004. It was the largest yearly gain since the 3.4% increase in 2000.

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The surprising moderation in inflation at the end of the year could give the Federal Reserve a reason to end its cycle of interest rate increases after a 14th rate hike on Jan. 31. Currently, financial markets expect the Fed to stop after a rate hike in March.

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