The consumer price index was unchanged in December, according to the Bureau of Labor Statistics. This was in-line with consensus estimates and an increase from November’s -0.3 percent decline. The primary drag on prices was lower energy costs. Gasoline prices were off 2.3 percent, building on the 7.4 percent decline the previous month.

Overall energy costs were down 1.2 percent for the month. Meanwhile, food prices have risen 0.2 percent for each of the past three months (October to December). In December, the largest increase for food items occurred among fruits and vegetables (up 0.6 percent).

Core inflation – which excludes food and energy costs – rose just 0.1 percent in December, the same as was observed in November. Inflation is running at the 1.9 percent rate on a year-over-year basis. As we saw yesterday with producer prices, the annual rate of inflation has eased throughout the year, largely on lower energy costs. Inflation was 2.3 percent in January 2012. For the most part, pricing pressures remain under control, at least for now, up modestly and within the range set by the Federal Reserve Board.

Chad Moutray is chief economist, National Association of Manufacturers.

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