U.S. consumer prices jumped by 4.1 percent for all of 2007, the largest amount since 1990, as costs for both energy and food shot up, the Labor Department reported Wednesday.

The 2007 rise in the department´s Consumer Price Index, a measure of inflation at the retail level, was up sharply from an increase of 2.5 percent in 2006.

Last year, energy prices surged 17.4 percent and food costs rose by 4.9 percent. Both were the biggest increases since 1990. Gasoline costs advanced by 29.6 percent, the largest rise since 1999.

Core consumer prices, which exclude volatile energy and food prices, were up 2.4 percent last year, down slightly from a 2.6 percent gain in 2006.

Outside energy and food, costs for both clothing and new cars declined by 0.3 percent for 2007. But airline fares rose by 10.6 percent and medical care costs increased by 5.2 percent.

For December last year, consumer prices rose by 0.3 percent, down from a 0.8 percent increase in November. Food costs climbed up by 0.1 percent, down from a 0.3 percent gain in the previous month, while energy prices rose by 0.9 percent after a 5.7 percent jump.

Excluding food and energy, core inflation rose 0.2 percent in December, down slightly from a 0.3 percent increase in November.

With core inflation generally remaining in-check, the Federal Reserve still has the leeway to cut interest rates further to prevent the severe housing slump and credit crisis from dragging the economy into a recession, according to analysts.

The worry is that the jump in energy and food could become more widespread and start pushing core inflation higher, they say.

Source: Xinhua