U.S. consumer prices rose a relatively modest 0.3 percent in December but for all of 2007
prices shot up at the fastest rate in seventeen years, largely because of soaring energy costs, the Labor Department reported on Wednesday.
Meanwhile, U.S. industrial production was flat in December versus expectations for a slight decline, but for last year as a whole it notched the weakest reading since 2003.
The Consumer Price Index, the most broadly used gauge of inflation, rose 4.1 percent in 2007, well ahead of the 2.5 percent increase posted in 2006 and the largest 12-month rise since a 6.1 percent increase in 1990.
December's CPI rise followed a sharp 0.8 percent jump in November and was modestly ahead of Wall Street economists' forecasts for a 0.2 percent gain.
Core prices that strip out volatile food and energy items rose 0.2 percent in December - in line with forecasts - following a 0.3 percent November increase. For all of 2007, core prices were up 2.4 percent following a 2.6 percent pickup in 2006. That was the smallest 12-month rise in core prices since a 2.2 percent increase in 2005.
The department said both food and energy costs rose during the full year of 2007 at the fastest rates since 1990. Energy costs in the 12 months were up 17.4 percent while food gained 4.9 percent .
On Industrial output, economists polled by Reuters ahead of the data had forecast a decline of 0.2 percent after a 0.3 percent rise in November.
Industrial production was up 2.1 percent for 2007, the slowest growth since a 1.1 percent gain in 2003.
Manufacturing output was also flat last month following a revised 0.3 percent rise in November, the data showed. This was originally reported as a 0.4 percent rise.