The Commerce Department said its personal consumption expenditures (PCE) price index climbed by 0.4 percent in December after inching up by 0.2 percent in November.

The slightly bigger than expected monthly increase by prices came as prices for goods grew by 0.4 percent and prices for services rose by 0.3 percent.

The report also said the PCE price index in December was up by 2.9 percent compared to the same month a year ago, reflecting an uptick from 2.8 percent in November. The annual rate of growth was expected to remain unchanged.

Excluding food and energy prices, the core PCE price index still increased by 0.4 percent in December after rising by 0.2 percent in November.

The annual rate of growth by the core PCE price index also accelerated to 3.0 percent in December from 2.8 percent in November.

The Federal Reserve's preferred readings on consumer price inflation were included in the Commerce Department's report on personal income and spending.

The report said personal income rose by 0.3 percent in December after climbing by an upwardly revised 0.4 percent in November.

Disposable personal income, or personal income less personal current taxes, rose by 0.3 percent for the second consecutive month.

Meanwhile, the Commerce Department said personal spending grew by 0.4 percent in December, matching a downwardly revised increase in November as well as economist estimates.

With spending climbing more than income, personal saving as a percentage of disposable personal income edged down to 3.6 percent in December from a revised 3.7 percent in November.

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