U.S. consumer prices fall in December

U.S. consumer prices fell in December of 2015, largely because of the falling energy prices.

Consumer Price Index (CPI), a main gauge of inflation, went down 0.1 percent in December on a seasonally adjusted basis, while the index was unchanged in the previous month, said the Labor Department on Wednesday. On a year-on-year basis, the index increased 0.7 percent.

The indexes for energy and food both declined for the second month in a row, leading to the decline in the CPI, said the Labor Department. The energy index declined 2.4 percent in the month, and the food index fell 0.2 percent.

Excluding the volatile food and energy categories, the so-called core CPI went up 0.1 percent in December on a seasonally adjusted basis, the smallest increase since August. The core CPI was up 2.1 percent from a year earlier.

However, the core personal consumption expenditure price index, the U.S. Federal Reserve's favored inflation gauge, increased only 1.3 percent on a year-on-year basis in November 2015, below the central bank's 2 percent inflation target.

The persistently low inflation environment has posed a policy risk for Fed officials who will meet later this month to discuss the future policy actions. Investors hold that the Fed appeared unlikely to move interest rate at the meeting after lifting the rate from near zero in December of 2015. Enditem