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The data were unlikely to have much influence on interest rate expectations, however, as the Federal Reserve prefers to take its measure of price pressures from personal consumption expenditure (PCE) data, published later in the month.
The US central bank has scheduled three rate rises this year and these latest figures have seen the pound reach its highest level against the dollar since the European Union referendum.
Total retail sales rose to $495.4 billion in the final month of the year, a 0.4 percent increase compared to November.
Consumer spending accounts for more than two-thirds of the US economy and it increased at a 2.2 per cent annualized rate in the third quarter, when the economy grew 3.2 per cent.
The core inflation rose 1.8 percent for the 12 month ending December.
Looking at some of the components, the report said that food index increased 1.6% in 2017, while energy index increased 6.9%.
The dollar trimmed losses against a basket of currencies after the data. The yield on the two-year Treasury note surpassed 2 percent for the first time since the peak of the financial crisis in late 2008 after the inflation report was released Friday by the Labor Department.
The energy index last month fell 1.2 percent compared to November. Owners' equivalent rent of primary residence climbed 0.3 percent after gaining 0.2 percent in November. Core inflation, which excludes food and fuel inflation, remained above 5 per cent for the second consecutive month at 5.56 per cent. Eggs, vegetables and fruits turned costlier, while inflation moderated in case of cereals and pulses. The cost of both hospital and doctor visits increased 0.3 per cent.
"The cumulative growth for the period April-November 2017 over the corresponding period of the previous year stands at 3.2 per cent", the CSO report on the "Quick Estimates" of Index of Industrial Production (IIP) for November said. The cost of motor vehicle insurance increased 0.6 percent. Apparel prices, however, fell 0.5%. The December increase was driven by a 2.7% decline in gasoline prices.
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.
The for final demand slipped 0.1 percent last month. Data for November was revised to show sales gaining 0.9 percent instead of the previously reported 0.8 percent increase. The statistical impact of an unfavorable base also rose the year-on-year print. Food away from home grew 0.2%. Sales at auto dealerships rose 0.2 per cent.
In the coming months, rising crude oil prices, which are at a 3 year high at the moment, could pose an even bigger risk to inflation in the country.
For the full year, CPI rose 2.1 percent, the same as 2016, while core CPI slowed, posting a 1.8 percent increase after the 2.2 gain in the previous year.
"The upward revisions to November and October put consumer spending on a stronger upward trajectory than we thought", said John Ryding, chief economist at RDQ Economics in NY. Manufacturing grew 10.2 per cent against 2.5 per cent in October.