The cost of living is declining in the United States

cost of living declines in the United States

There was some good news for US consumers in December as the cost of living fell in the United States, led by a slump in commodities.

The consumer-price index decreased by 0.1%, a Labor Department report showed Wednesday.

Excluding food and fuel, the core index rose 0.1%, less than forecast and the smallest gain in four months.

Federal Reserve officials are betting prices will accelerate as they consider more increases in the benchmark interest rate.

 There’s “ongoing downward pressure on goods prices stemming from lower oil and global headwinds,” Harm Bandholz, chief U.S. economist at UniCredit Bank AG in New York, told Bloomberg.

Core consumer prices were projected to rise 0.2% according to the median forecast in the Bloomberg survey of economists.

Consumer prices climbed 0.7% in 2015 after rising 0.8% n 2014. It was the smallest advance since 2008.

The core rate is falling led by declining energy and basic goods costs.

Excluding food and energy, the core rate rose 2.1% last year following a 1.6 percent increase in 2014.

December energy costs were down 2.4% and fell 12.6% in 2015. Food costs were down 0.2% from November to December.

The core index declined as the price of clothing, airline fares, hotel room rates and new cars, decreased.

Energy prices continue to fall with the average cost of a gallon of regular gasoline sitting at $1.88 on January 18, the cheapest in almost seven years, according to AAA.