The core consumer price index advanced less than anticipated in December, restrained in part by a deceleration in shelter costs and underscoring the U.S. Federal Reserve’s perspective that price pressures are muted. The core CPI, which excludes food and energy costs, ticked up 0.1% in December from November, the smallest increase in three months, according to the U.S. Department of Labor. Economists surveyed by Bloomberg had forecast a 0.2% increase. Compared with a year ago, the core CPI climbed 2.3%, in line with forecasts. The broader CPI rose 0.2% from November and 2.3% from December 2018, both below expectations.

DOL’s CPI tends to run higher than the U.S. Department of Commerce’s personal consumption expenditures price index, which the Fed officially targets. The core PCE index softened in November, climbing 1.6% from a year earlier. Core PCE has held below the 2% objective for most of the last seven years. Although inflation remains relatively contained, the 2.3% full-year increase in the core CPI gauge was the fastest for a calendar year since the 2.4% rise seen in 2007.

A separate DOL report released today showed average hourly earnings, adjusted for price changes, increased 0.6% in December from a year earlier after 1.1% the previous month. The monthly jobs report last week had already revealed an unexpected deceleration in nominal wages.