US inflation lower than forecast

Washington: The cost of living in the US slowed in December from a month earlier, indicating the economic recovery is showing few signs of stoking inflation.

The consumer-price index rose 0.1%, less than forecast, following a 0.4% gain in November, Labour Department figures showed. Excluding food and energy costs, the so-called core index also increased 0.1%.

Companies may have little success raising prices with unemployment projected to average 10% this year, the highest annual rate in seven decades. Federal Reserve policy makers have said they expect “subdued” inflation in coming months, allowing them to keep interest rates close to zero to help fuel growth.