The US consumer prices dropped in December by the highest amount in six years, indicating toward another big monthly drop in gasoline prices and offering further evidence of declining inflation pressures.
The Labor Department report, released on Friday, showed that its consumer price index declined 0.4 percent on December, the largest one-month fall since December 2008.
It was also the second consecutive monthly drop in prices with both months reflecting major fall in gas prices that have been tumbling in the recent months due to the plunge in prices of oil globally.
The core inflation that excludes energy and volatile food showed no surge in the month of December, only the second time since 2010 that core prices have not increased.
Jennifer Lee, senior economist at BMO Capita Markets, said, “There is little inflation pressure in the United States or almost anywhere else for that matter.”
The overall inflation rate increased only 0.8 percent for all of 2014, marking the smallest annual rise since 2008.
Even before the big plunge in prices of oil, the country’s inflation has been running levels well below the two percent that the US central bank sees as an optimal annual rise for prices. That has also provided the Federal Reserve leeway to maintain a key interest rate at a record low to encourage the economic growth.
The Federal Reserve in December said that it want to be “patient” about increasing the interest rates, extending support to the view among several economists that the first rate hike will not occur until June this year.
Core inflation increased 1.6 percent for the 12-month ending in the month of December. In December, the core prices were held back by a major five percent decline in airline fares.