U.S. Consumer Prices Fall On Energy Collapse

U.S. consumer prices dipped slightly in December amid plunging oil prices and a strong US dollar, fresh government data showed Wednesday.

This came as a surprise to economists, who had expected the measure to remain flat.

The U.S. Department of Labor reported that its consumer price index, a key gauge of retail inflation, slipped 0.1 percent for December.

Still, the CPI increased 0.7 percent annually through December, the biggest increase in a year.

Core consumer prices, a figure that strips out the volatile food and energy sectors, advanced by only 0.1 percent.

Economists projected another 0.2 percent increase after similar increases the previous three months.

With consumer prices remaining below their target for inflation, the Federal Reserve will likely leave interest rates on hold for some time.