The Labor Department reported that consumer prices were flat in December following a decline of 0.3 percent in November and, for all of 2012, the government’s official measure of inflation came in at 1.7 percent. This follows annual gains of 2.8 percent in 2009, 1.4 percent in 2010, and 3.0 percent in 2011.
After tumbling 4.1 percent in November, energy prices fell 1.2 percent last month and rose just 0.5 percent for the year. Gasoline prices fell 2.3 percent in December after plunging 7.4 percent the month prior, ending 2012 with a gain of just 1.7 percent.
Food prices rose 0.2 percent in December for the second straight month and ended the year 1.8 percent higher while the cost of medical care services led all other major categories in 2012 with a gain of 3.7 percent after rising 0.3 percent last month as shown below.
Shelter costs, a group that contributes nearly one-third to the overall consumer price index, rose 0.1 percent in December and gained 2.2 percent for the year.
Excluding food and energy, so-called “core inflation” rose 0.1 percent for the second month in a row and registered an increase of 1.9 percent for the year.