That was half the increase expected by analysts. The small difference in numbers is actually a big difference, because the Federal Reserve has said that core inflation (excluding volatile food and energy prices) above 2% would motivate additional tightening. The rising crude oil prices can further push the fuel inflation.
The Consumer Price Index CPI measures the cha nge in prices paid by consumers for goods and services.
The dollar briefly trimmed losses against a basket of currencies after the CPI data, but later slumped to a four-month low.
Shortly after the latest CPI report, the 10-year inflation breakeven rate, or the yield gap between 10-year Treasury Inflation Protected Securities and regular 10-year Treasury notes, hit 2.05 percent, its highest level since March, Tradeweb and Reuters data showed. The consensus is for 0.5%, while it was 0.8% in November.
According to the data released by The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation, retail inflation went up mostly due to hardening fuel and vegetable prices. The cost of motor vehicle insurance increased 0.6 percent.
Dallas Fed President Robert Kaplan told CNBC that he believes the unemployment rate could fall below 4 percent. That lowered the year-on-year increase in the CPI to 2.1 percent from 2.2 percent in November.
Despite the month-over-month decline, the PPI posted a 2.6% gain for all of 2017 when compared to 2016 when it registered a 1.7% increase.
Shelter costs rose 0.4 percent in the month, faster than usual, while medical care increased 0.3 percent and food was up 0.2 percent. The December decline was led by a 2.7 percent drop in the price of gasoline, which had jumped 7.3 percent in November. For all of 2017, retail sales were 4.2% higher than 2016, the biggest annual hike in three years.
These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product.
Advanced Micro Devices (AMD.O) fell 1.61 percent after the chipmaker said its microprocessors are prone to both variants of the Spectre security flaw, days after saying its risk for one of them was "near zero".
The U.S. central bank raised interest rates for three times in 2017 and forecast three rate increases in 2018.
Electricity production grew 3.9 percent in November as compared with 3.2 percent in October.