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Consumer prices in US fall, reflecting slump in commodities

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The cost of living in the US dropped in December, led by a slump in commodities that's roiling global markets.

[WASHINGTON] The cost of living in the US dropped in December, led by a slump in commodities that's roiling global markets.

The consumer-price index declined 0.1 per cent after being little changed in November, a Labour Department report showed Wednesday. The median forecast in a Bloomberg survey of economists called for a 0.1 per cent increase. Excluding food and fuel, the so-called core index rose 0.1 per cent, less than forecast and the smallest gain in four months.

The unabated plunge in energy prices has kept inflation under wraps even as a tighter labor market provides impetus for a pickup in wage growth. Federal Reserve officials are betting prices will accelerate as they consider further increases in the benchmark interest rate.

"The thing that's been driving everything is energy - that's obviously going to weigh on this headline reading," Jacob Oubina, US economist at RBC Capital Markets LLC in New York, said before the report.

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Core consumer prices were projected to rise 0.2 per cent according to the median forecast in the Bloomberg survey of economists.

For all of 2015, consumer prices climbed 0.7 per cent after rising 0.8 per cent in 2014.

Excluding food and energy, they rose 2.1 per cent last year following a 1.6 per cent increase in 2014.

BLOOMBERG

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