The Consumer Price Index ticked 0.1% higher (2.1% y/y) during December, moderating from a 0.4% November rise. Prices excluding food & energy accelerated, however, posting a 0.3% rise (1.8% y/y ). That's the strongest increase since January 2017. The overall CPI gain matched expectations in the Action Economics Forecast Survey. A 0.2% increase had been expected for prices excluding food & energy.

Pricing power in the core goods sector improved notably last month with a 0.2% gain (-0.7% y/y), only the third increase in about twelve months. The y/y change remained weak, however, at -0.7%. Medical care product prices surged 1.0% (2.3% y/y) and equaled the strong July rise. Appliance prices increased 0.5% last month (-1.0% y/y) and the y/y decline of 1.0% compared to -5.2% in 2014. New vehicle prices jumped 0.6% (-0.5% y/y) and used car prices surged 1.4% (-1.0% y/y). The cost of furniture improved 0.1% (-1.7% y/y) after ten months of decline. Prices of recreation goods remained under pressure posting a 0.4% drop (-3.4% y/y). Apparel prices were off 0.5% and the y/y decline of 1.6% was the weakest reading since 2015.

Service prices remained firm as they posted a 0.3% gain (2.6% y/y). Shelter prices rose 0.4% (3.2% y/y) as the cost of lodging away from home surged 0.8% (0.6% y/y). Owners' equivalent rents of primary residence gained 0.3% and a steady 3.2% y/y. Transportation services prices rose an improved 0.3% m/m, but the y/y change remained stable. Medical care services prices rose an improved 0.2%, but the y/y increase of 1.6% compared to 5.1% y/y in August of 2016. Public transportation costs held steady (-1.6% y/y). Recreation services prices rose an improved 0.3%, lifting 2017's rise to 3.8%, up from 2.9% y/y in 2016. Education costs rose 0.2%, with the 2.2% y/y rise the most moderate since the 2004 peak of 7.1%.

Food prices gained 0.2% (1.6% y/y), the strongest change since July. Meat, poultry & fish costs surged 0.7% with the 2.3% y/y gain up from -3.5% in 2016. Egg prices jumped 3.8% (11.6% y/y). Cereal & bakery product prices gained 0.2% but continued to decline by a steady -0.6% y/y. Dairy & related product prices declined 0.4% and were down a lessened 0.5% y/y. Fruit & vegetable prices declined 0.2%, and the 1.5% y/y rise compared to a 2016 decline of 2.4%. Nonalcoholic beverages prices eased 0.1% and were unchanged y/y compared to a 0.4% in 2016. The cost of eating out increased an improved 2.3% following a 2.9% 2015 rise.

Energy prices declined 1.2% last month (+6.9% y/y) as gasoline prices fell 2.7% (+10.7% y/y) following a 7.3% rise. Fuel oil prices improved 0.3% (12.6% y/y) after four months of stronger increase. Utility costs strengthened 1.2% (4.7% y/y), the strongest rise since May. Electricity prices inched 0.1% higher leaving the y/y gain of 2.6% elevated compared to 2016's 1.1% decline.

The consumer price data can be found in Haver's USECON database with additional detail in CPIDATA. The Action Economics survey figure is in the AS1REPNA database.