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U.S. NEWS A7
Thursday 21 January 2016
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US Financial Front:
American consumer prices fell 0.1 percent in December
M. CRUTSINGER eventually strengthen. The
AP Economics Writer
WASHINGTON (AP) — U.S. quarter-point increase
consumer prices fell in De-
cember and rose by the pushed the federal funds
smallest amount in seven
years in 2015, reflecting rate from near zero to a
the toll of slumping energy
costs. range of 0.25 percent to
Consumer prices slipped
0.1 percent last month af- 0.5 percent.
ter a flat reading in Novem-
ber, the Labor Department Fed officials have stressed
reported Wednesday.
For the entire year, over- that the pace of future
all inflation was up just 0.7
percent, even smaller than rate increases will be heav-
a 0.8 percent rise in 2014.
Both years were heavily in- ily dependent on signs that
fluenced by plunging ener-
gy prices. It was the weak- inflation is beginning to ac-
est annual increase since a
0.1 percent rise in 2008. celerate closer to the Fed’s
Core inflation, which ex-
cludes volatile energy and target of 2 percent annual
food costs, edged up 0.1
percent in December. That price gains.
was the smallest monthly
gain since August. For the But since the Fed met last
full year, core inflation was
up 2.1 percent after a 1.6 month, oil prices have de-
percent rise in 2014.
The Federal Reserve, how- clined further. That sug-
ever, last month boosted a
key interest rate for the first gests it might take even
time in nine years, saying
it believed inflation would longer for the Fed to hit its
target.
For December, energy
prices fell 2.4 percent and
are down 14.9 percent for A woman shops in an Aeropostale clothing store, in New York. The Labor Department reported on
consumer prices for December, on Wednesday, Jan. 20, 2016.
the year. Food costs de-
(AP Photo/Mark Lennihan)
clined 0.2 percent and are
up a modest 0.8 percent
for the year. for the 12 months ending home furnishings and edu- in energy and food costs,
in December followed a cation. Meanwhile, prices however, may pull her pro-
The nationwide average 12-month rise of 2 percent for clothing, airline fares jection lower.
in November. It was the and new cars declined in The Fed next meets on Jan.
for a gallon of gasoline is largest 12-month gain in December. 26-27, and private econo-
core prices since a similar Laura Rosner, an econo- mists widely believe that
down to $1.88, 12 cents 2.1 percent increase in July mist with BNP Paribas, said the Fed will leave rates
2012. that she is forecasting over- unchanged. Some econo-
lower than a month ago. Driving core inflation in De- all inflation will rise by 1.4 mists say it could be June
cember were increases for percent in 2016. The po- before the Fed raises rates
But some analysts see the shelter costs, medical care, tential for further declines again.q
uptick in core inflation as
a sign that inflation outside
of energy and food is be-
ginning to accelerate. The
2.1 percent rise in the core
US housing starts slip in December, but annual gains solid
JOSH BOAK dition to the drag caused Last year marked the stron- The change reflects a dex of activity compiled by
AP Economics Writer by flooding across parts of gest performance for home dwindling share of home BuildZoom, an online mar-
WASHINGTON (AP) — US the South and Midwest that construction since 2007, ownership. That figure now ketplace for contractors,
builders started fewer likely slowed construction. right when the housing rests at 63.7 percent, down and the Urban Economics
homes in December, but “Looking beyond monthly bubble triggered the start from a high of 69.2 percent Laboratory of the Center
prior gains meant that resi- performance, U.S. home- of the Great Recession. in 2000. for Real Estate at Massa-
dential construction ended builders continued to make But the construction figures During the more than six chusetts Institute of Tech-
2015 at its healthiest level in gradual progress in 2015,” show rapid changes in how year recovery from the re- nology.
eight years. said Ksenia Bushmeneva, Americans live as apart- cession, many existing ho- Remodeling activity has
Housing starts dipped 2.5 an economist at TD Bank. ments have become more meowners chose to remod- fallen 1.7 percent from a
percent last month to a “This modest but positive popular among builders. el their home instead of up- year ago as new construc-
seasonally adjusted annual momentum is expected to Over the course of 2015, grading to a new property. tion has picked up, accord-
rate of 1.15 million homes, continue this year, as robust ground breakings climbed Permits for new construc- ing to an update of the in-
the Commerce Depart- job creation, improved 10.8 percent to 1.1 million. tion are still running at dex released this month.
ment said Wednesday. This household formations and But multifamily complexes roughly half their 2005 But remodeling has surged
marks some giveback af- still-low interest rates con- were 34.6 percent of all peak. But permits for re- in some of the priciest mar-
ter starts climbed 10.1 per- tinue to support demand starts last year, compared modeling have fully recov- kets where housing costs
cent in November, in ad- for housing.” to just 20.5 percent in 2007. ered, according to an in- have climbed. q
