Consumer prices rose +0.2% in December, slowing from November’s +0.3% monthly gain. Energy costs were up 1.4% for the month and +3.4% for the year, primarily due to gasoline price increases (+2.8% monthly, +7.9% Y/Y). Core consumer inflation, which excludes food and energy costs, was up +0.1% for the month and +2.3% for the year, up from +1.9% in 2018, and the highest yearly increase since a +3.0% gain in 2011. On a yearly basis, core prices increased for medical care services (+5.1%), shelter (+3.2%), and medical commodities (+2.5%), and declined for apparel (-1.2%) and used vehicles (-0.7%).

Retail sales rose +0.3% in December, matching November’s +0.3% increase, and were up +5.8% compared to December 2018. Total sales for all of 2019 were up +3.6% compared to 2018. Nonstore (i.e. online) retailers had the highest yearly gains, with a +0.2% gain for the month and +19.2% for the year. Gasoline station sales also had large gains (+0.2% monthly, +11.3% Y/Y), but sales estimates do not account for price changes and this increase includes the effect of rising gasoline prices. Monthly vehicle sales were down -1.4%, but up +4.1% for the year, and sales excluding both vehicles and gas stations were up +0.5% for the month and +5.7% for the year. On a yearly basis, the only businesses with slowing sales were electronics and appliance stores (-0.7%) and department stores (-5.5%).

Utilities production fell -5.6% in December, offsetting gains of +0.2% for manufacturing and +1.3% for mining to bring overall industrial production down -0.3% for the month, for its third decline over the past four months. The drop in utilities production was primarily due to unseasonably warm December weather after an unseasonably cold November, which reduced the demand for heat compared to the previous month. Total industrial production for December was -1.0% less than December 2018, and fell at an annual rate of -0.5% for Q4. The gain in mining output was due chiefly to increases in oil and gas extraction, and mining grew at a +1.9% annual rate in Q4, reversing a -2.0% drop in Q3. Manufacturing output fell at a -1.0% annual rate in Q4, reversing a +0.8% gain in Q3, with drops of -1.6% for durable manufacturing and -0.4% for non-durables.