US inflation falls for first time since March as petrol prices drop

Koehler Urges Higher Gas Prices
US hospital costs rose 0.5 in December (Source: Getty)

Cheaper prices at the pumps pushed down US inflation for the first time in nine months in December.


Statistics released today show the country’s consumer price index (CPI) dropped 0.1 percentage points last month to 1.9 per cent, making December’s fall the first since March.

However, when stripping out changes to the price of food and energy inflation rose 0.2 per cent for the third month in a row.

Oil prices have fallen globally since October, with international standard Brent crude down around 40 per cent since highs of $85.

The price fell a further two per cent today following a week-long rally which saw it bounce back from year-lows of around $51 per barrel in December.


Moderate inflation could lend support to the Federal Reserve’s policy on interest rate hikes. It is expected to increase rates twice this year.

“The Fed will take this as further proof that price pressures are building more slowly than some have feared based on the strong growth of late and tight labour market,” said James McCann, at Aberdeen Standard Investments.

“It certainly seems to justify the Fed’s message about being more patient on rate increases.”

Healthcare costs rose 0.3 per cent, driven by increases in hospital services, but tempered by a fall in the cost of prescriptions.