Inflation watch: December consumer prices up just 0.1 pct

High food prices push India's retail inflation to 17-month high of 5.2 per cent

CPI Inflation at 5.21%, hits 17 months high in December 2017

The retail inflation for rural India was recorded at 5.27 per cent which was 5.09 for the urban areas.

The cumulative growth in these three sectors during April-November 2017 over the corresponding period of 2016 was 3.0 percent, 3.1 percent and 5.2 percent respectively. The December gain was the smallest advance since October.

For the full year, CPI rose 2.1%, the same as 2016, while core CPI slowed, posting a 1.8% increase after the 2.2% gain in the previous year.

According to some economists, the latest rise in core inflation provides some incentive to raise interest rates. The Fed last year accelerated that pace, raising rates three times and signalling at its meeting last month that it expected to raise rates at the same clip this year. Vegetable prices rose the most in December - by 29.13%.

The US consumer price index, which measures the costs of goods and services to individuals, rose just 0.1% in December, the Commerce Department said in its monthly report. Central bankers have penciled in three rate hikes in 2018 following three past year.

Weak import and producer price reports this week had raised concerns about the inflation outlook, although the two reports do not have a strong correlation with the CPI data.

On the other hand, the report showed a steep drop in energy prices, which slumped by 1.2% in December after spiking by 3.9% in November. The government figures show that gas prices are up 6.9 per cent from December 2016.

Along with the shelter index, the indexes for medical care, used cars and trucks, new vehicles, and motor vehicle insurance also increased in December.

Housing inflation grew 8.25 percent in December from 7.36 percent a month ago, while fuel inflation, which has seen an uptick in July, remained unchanged at 7.9 percent in December.

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