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.