Retail sales data were also published on Friday and - while not as impressive as the upwardly-revised November figures - remained robust over the December and Christmas period. The reports probably will keep the Federal Reserve on course to increase interest rates in March and raise the prospects of a more aggressive monetary policy tightening this year. The US central bank hiked borrowing costs three times in 2017.
Friday's report on consumer prices offered the latest evidence to support the Fed's view that decelerating price pressures last spring would prove transitory.
Total retail sales rose to $495.4 billion in the final month of the year, a 0.4 percent increase compared to November.
USA producer prices fell for the first time in almost 1-1/2 years in December amid declining costs for services, which could temper expectations that inflation will accelerate in 2018.
Retail sales rose 0.4 per cent in December from the previous month and was up 5.4 per cent from a year earlier on the back of higher costs for motor vehicles. Eggs, vegetables and fruits became costlier, while inflation moderated for cereals and pulses.
After coming in below the Fed's target for years, United States inflation appears to have rebounded in the US. The Fed's preferred inflation measure, the personal consumption expenditures (PCE) price index excluding food and energy, has undershot its target since May 2012.
Low base from November 2016 helps India Inc's output grow 8.4%. Prices for U.S. Treasuries fell, with the yield on the interest-rate sensitive two-year note rising to its highest since 2008.
The core rate on the Consumer Price Index, a proxy on the underlying inflation trend that excludes volatile food and energy prices, grew 0.3 percent last month, which was the biggest monthly gain in 11 months.
Among the 12 sub-groups in the food and beverages category, 10 showed a rise in prices. The cost of both hospital and doctor visits increased 0.3 percent. A 0.4% rise in shelter costs from the prior month accounted for much of December's uptick. Economists were expecting to see a 0.2% rise in price pressures.
Electricity production grew 3.9 percent in November as compared with 3.2 percent in October.
Including all items, the broader CPI showed a smaller gain in December in line with estimates, as energy prices declined, a Labour Department report showed yesterday.
At the same time, food price inflation came in at 4.96 percent, which was slightly faster than the 4.35 percent seen a month ago. Owners' equivalent rent of primary residence climbed 0.3% after gaining 0.2% in November. The so-called core PPI increased 0.4 percent in November.
The for final demand slipped 0.1 percent last month.
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