The cost of living in the U.S. was little changed in December for a second month as stores cut prices to boost holiday sales and fuel expenses fell, reinforcing the Federal Reserve’s view that inflation will remain in check.
The unchanged reading in the consumer-price index reported by the Labor Department today in Washington compared with a median forecast of a 0.1 percent gain, according to a Bloomberg News survey of 78 economists. Excluding (CPUPXCHG) volatile food and fuel costs, the so-called core rose 0.1 percent as projected.
Retailers from Williams-Sonoma Inc. (WSM) to Macy’s Inc. (M) used discounts to attract customers constrained by stagnant incomes and property values that keep falling as the housing market struggles to recover. Less inflation means Federal Reserve officials have leeway to take additional steps to spur growth should the economic expansion stumble.
“There are no signs of budding inflationary pressures,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh, who accurately forecast prices would remain steady. “The core index is going to be pleasing to the Fed.”
Economists’ estimates ranged from a drop of 0.1 percent to a gain of 0.3 percent.
