January 16, 2015 Reading Time: < 1 minute

Look for the Federal Reserve to be even more patient with raising interest rates amid this morning’s data showing that consumer prices were still quite tame.

The Consumer Price Index fell 0.4 percent in December, which is the biggest one-month drop since December 2008. It fell 0.3 percent in November, but over the last year is up 0.8 percent. Helping pull the index lower was a 9.1 percent drop in energy goods.

Outside of energy, most consumer goods and services experienced very modest price increases, or in some cases price decreases.  The few exceptions were health care, particularly hospitals and pharmaceuticals, college tuition, housing, and restaurants.

Slow wage growth helped keep demand in check, while a strong dollar and ongoing gains in productivity are helping restrain cost pressures.

Robert Hughes

Bob Hughes

Robert Hughes joined AIER in 2013 following more than 25 years in economic and financial markets research on Wall Street. Bob was formerly the head of Global Equity Strategy for Brown Brothers Harriman, where he developed equity investment strategy combining top-down macro analysis with bottom-up fundamentals. Prior to BBH, Bob was a Senior Equity Strategist for State Street Global Markets, Senior Economic Strategist with Prudential Equity Group and Senior Economist and Financial Markets Analyst for Citicorp Investment Services. Bob has a MA in economics from Fordham University and a BS in business from Lehigh University.

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