Inflation appears to be largely in check even as interest rates in the United States remain near zero and the government pumps billions into the economy. The consumer price index (CPI), a broad gauge of inflation, increased 0.1 percent in December, down from a 0.4 percent advance in November. This is the lowest rate since July.
The core CPI, which excludes food and energy costs, also rose 0.1 percent, a tick more than the unchanged reading in November.
By the end of 2009, prices had jumped 2.7 percent from the previous year. The core CPI rose 1.8 percent in 2009, the same rate as the prior year.
The meager rise in the CPI means Federal Reserve policy makers will probably keep interest rates at their historic lows for the immediate future.
Many economists believe inflation will not emerge as a threat for some time because of the large amount of excess capacity, high unemployment, and weak housing market.
Across the country, machines sit idle or are running at reduced capacity at many factories. A separate report released Friday said utilization reached 72 percent, the highest level in a year. Yet that remained far below the historic average of 80.9.
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