Consumer prices up 0.4% in December led by higher gas prices

Cover Image
Photo credit A shopper loads her basket next to a display of paper towels in a Costco warehouse in this photograph taken Wednesday, Nov. 18, 2020, in Sheridan, Colo. U.S. consumer prices edged up 0.2% in November as a rise in energy costs and variety of other items offset a drop in food costs. The Labor Department reported on Thursday, Dec. 10, that the gain in the consumer price index followed an unchanged reading in October and matched the 0.2% September advance. (AP Photo/David Zalubowski)
By The Associated Press

WASHINGTON (AP) — U.S. consumer prices rose 0.4% in December, led by a sharp rise in gasoline prices.

The Labor Department said Wednesday that the December increase followed a 0.2% rise in November and no change at all in October It was the largest advance in four months.

Inflation for all of 2020 was up a modest 1.4%, well below the Federal Reserve's 2% target. Analysts believe inflation will remain well-behaved with the economy still struggling to emerge from a pandemic-induced downturn.

Inflation has been dormant over the past decade, a development that is allowing the Federal Reserve to keep interest rates at ultra-low levels to provide a boost to an economy struggling with a surge in Covid-19 cases that has forced renewed business shutdowns at a time millions of people remain out of work.