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Consumer inflation posts biggest drop in six years

U.S. consumer prices fell 0.4% in December, the largest drop since the end of 2008, hit by tumbling prices for gasoline and other types of energy, according to government data released Friday.The drop matched expectations from economists polled by MarketWatch.

Energy prices plunged 4.7% in December, the biggest drop since the end of 2008, as gasoline fell 9.4%, the U.S. Labor Department report. Excluding the volatile categories of food and energy, the “core” reading of inflation showed that prices were unchanged in December, compared with a gain of 0.1% in November.

Economists had expected core inflation of 0.1%. Consumer prices grew 0.8% in 2014 — the second smallest calendar-year increase in the last five decades. Inflation-adjusted average hourly earnings rose 0.1% in December.