U.S. consumer prices were unchanged last month, the latest sign that inflation remains contained, as lower gasoline prices offset rising costs for food, medical care, and housing, the government reported Thursday. The Labor Department said its consumer price index (CPI) was flat in December for the second consecutive month. Excluding volatile energy and food costs, "core" CPI rose 0.1 percent. Inflation seems to be peaking after rising sharply in 2011. Prices rose 3 percent in 2011, up from 1.5 percent in 2010 and the most since 2007. However, inflation is down significantly from the 12-month increase of 3.9 percent seen last September. Many economists expect inflation to decline this year. The prices for crude oil and many agricultural commodities, such as corn and wheat, have fallen, bringing down the price of gasoline and slowing food inflation. Slow economic growth and high unemployment also limit inflation. The Federal Reserve (Fed) estimates consumer price inflation will fall from about 2.8 percent in 2011 to about 1.7 percent this year. Lower inflation gives consumers more spending power, which boosts growth. Lower inflation also gives the Fed more room to keep interest rates low and take other steps to help the economy.
