(Reuters) -Apple ended Samsung Electronics’ 12-year run as the largest seller of smartphones in the world, after commanding a 20% market share in 2023, according to a report from International Data Corp.

Samsung ended the year with a 19.4% share, followed by China’s Xiaomi, Oppo and Transsion, preliminary data from IDC’s Worldwide Quarterly Mobile Phone Tracker showed.

The change in ranking comes after a tough year that saw consumers going slow on smartphone upgrades and choosing cheaper handsets due to high inflation and economic uncertainties.

A slower-than-expected recovery in China, the world’s largest smartphone market, also weighed on overall phone sales.

Apple and Transsion, which sells Tecno, Infinix and itel brands, were the only two of the top five smartphone vendors to record sales growth last year, even though the overall market declined 3.2% to 1.17 billion units and hit a decade low.

“While we saw some strong growth from low-end Android players like Transsion and Xiaomi in the second half of 2023, stemming from rapid growth in emerging markets, the biggest winner is clearly Apple,” said Nabila Popal, research director at IDC’s Worldwide Tracker team.

Phone shipments from Samsung were down 13.6%, while iPhone shipments were up 3.7% last year, according to IDC data.

Samsung focused on the mid- to high-end segment for profitability but lost share in the low-end segment, said Amber Liu of research firm Canalys.

Apple, however, is facing pressure in China from a resurgent Huawei as well as from budget Chinese brands. The iPhone maker is offering discounts of as much as 5% on some models in the country to attract customers.

Microsoft on Friday overtook Apple as the world’s most valuable public company, as Wall Street grew more concerned over the demand for its iPhones and other high-end gadgets.

(Reporting by Yuvraj Malik in Bengaluru; Editing by Anil D’Silva)

By Lucia Mutikani

WASHINGTON (Reuters) – U.S. retail sales rose more than expected in December, boosted by an increase in motor vehicle and online purchases, keeping the economy on solid ground heading into the new year.

The upbeat report from the Commerce Department on Wednesday, which prompted economists to upgrade their economic growth estimates for the fourth quarter, cast further doubt on financial market expectations that the Federal Reserve would start cutting interest rates in March.

It followed news earlier this month of strong employment and wage gains in December as well as a pickup in consumer prices. Fed Governor Christopher Waller on Tuesday described the economy as “doing well,” which he said was giving the U.S. central bank “the flexibility to move carefully and methodically” on monetary policy.

“The economy is still flying high enough and economists can take down those recession forecasts this year,” said Christopher Rupkey, chief economist at FWDBONDS in New York. “For Fed officials, the economy is not too hot and not too cold, but it is just right perhaps for a few interest rate cuts in 2024.” 

Retail sales rose 0.6% last month after an unrevised 0.3% gain in November, the Commerce Department’s Census Bureau said. Economists polled by Reuters had forecast retail sales would gain 0.4%. Retail sales are mostly goods and are not adjusted for inflation. Sales increased 5.6% on a year-on-year basis in December.

Sales were likely partially boosted by difficulties adjusting the data for seasonal fluctuations following distortions during the COVID-19 pandemic. In the last couple of years, consumers started their holiday shopping early to avoid empty shelves.

“We recommend averaging the December and January retail sales data, or averaging over the November to February period, to get a more reliable read on the state of the consumer,” said Aditya Bhave, senior U.S. economist at Bank of America Securities in New York.

Nonetheless, households have maintained a healthy pace of spending, thanks to the labor market’s resilience. Retailers also have offered discounts to lure holiday shoppers.

Online sales advanced 1.5%. Shopping has moved to online vendors and away from the traditional brick-and-mortar retailers, a trend that accelerated during the pandemic. Receipts at motor vehicles and parts dealers accelerated 1.1% as more stock became available after strikes ended in the fall.

Sales at building material and garden equipment outlets rose 0.4%. Receipts at sporting goods, hobby, musical instrument and book stores gained 0.3%. Clothing store sales jumped 1.5%.

Sales at food services and drinking places, the only services component in the report, were unchanged. That could be a potential red flag as economists view dining out as a key indicator of household finances. The unchanged reading, however, followed a 1.7% surge in November. December was also a very wet month, which could have lowered traffic to restaurants and bars.

Sales at electronics and appliance outlets fell as did those at furniture stores, likely the result of discounting. Gasoline station receipts dropped 1.3% as gasoline prices declined.

Financial markets pared back the odds of a Fed rate cut in March to roughly 53% from about 65% late on Tuesday, according to CME Group’s FedWatch Tool.

Stocks on Wall Street were trading lower. The dollar rose against a basket of currencies. U.S. Treasury prices fell.

STRONG CORE SALES

Though low-income households are believed to have exhausted excess savings accumulated during the pandemic and debt levels are rising, economists expect consumer spending to hold up this year as long as the labor market does not weaken considerably.

A nearly $80 billion bipartisan deal under consideration in Congress that could expand the child tax credit and boost the low-income housing tax credit through 2025 is also seen underpinning spending.

“There is the possibility we’ll see some level of pullback in consumer spending in 2024 as consumers reevaluate their budgets and pay down some elevated debt levels,” said Mike Graziano, a senior consumer products analyst at RSM US. “However, even if that is the case, consumers are on solid footing entering 2024.” 

Excluding automobiles, gasoline, building materials and food services, retail sales jumped 0.8% last month. The so-called core retail sales measure corresponds most closely with the consumer spending component of GDP.

Core sales for November were revised higher to show them rising 0.5% instead of the previously reported 0.4%.

Even with details on spending on services still pending, economists believe consumer spending, which accounts for more than two-thirds of U.S. economic activity, likely increased at about a 2.7% annualized rate in the fourth quarter. That was up from the pace of around 2.0% that most estimated before the report, but below the third quarter’s 3.1% rate.

The Atlanta Fed raised its growth estimate for gross domestic product in the fourth quarter to a 2.4% rate from a 2.2% pace. The economy grew at a 4.9% pace in the third quarter. The government is due to publish its first estimate of GDP growth for the October-December period next Thursday.

Some of the anticipated slowdown in GDP growth will likely reflect smaller inventory accumulation relative to the third quarter’s size. A separate report from the Census Bureau on Wednesday showed business inventories declined for a second straight month in November.

With the Fed expected to start cutting rates this year, most economists are confident the economy will avoid a downturn. The U.S. central bank has hiked its policy rate by 525 basis points to the current 5.25%-5.50% range since March 2022.

Though strong demand for goods is not boosting manufacturing, economists expected lower borrowing costs to provide support this year.

A separate report from the Fed showed production at factories gained 0.1% in December after a rise of 0.2% in November. Factory output fell at a 2.2% rate in the fourth quarter.

“Manufacturing is a relatively rate-sensitive sector that may benefit from recently lower rates and loosening financial conditions,” said Veronica Clark, an economist at Citigroup in New York.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama, Andrea Ricci and Paul Simao)

By Stephanie Kelly

NEW YORK (Reuters) -Oil fell around 1% on Wednesday as disappointing economic growth in China and a stronger U.S. dollar stoked worries about energy demand, while fears over supply disruptions due to intensifying conflict in the Red Sea eased.

Brent crude futures fell 87 cents, or 1.1%, to $77.42 a barrel by 1:19 p.m. EST (1819 GMT). U.S. West Texas Intermediate crude futures (WTI) were down 49 cents, or 0.7%, at $71.91.

The naval and air conflicts in the Red Sea have not supported oil prices despite mounting concern about tankers having to pause or reroute, raising shipping costs and slowing deliveries. Tensions remained high after the U.S. mounted fresh strikes against Iran-aligned Houthi militants in Yemen on Tuesday after a Houthi missile hit a Greek vessel.

The International Energy Agency (IEA) expects oil markets to be in a “comfortable and balanced position” this year, despite Middle East tensions amid a rising supply and slowing demand growth outlook, its executive director Fatih Birol told the Reuters Global Markets Forum.

China’s economy in the fourth quarter expanded by 5.2% year on year, missing analysts expectations and calling into question forecasts that Chinese demand will fuel 2024 global oil growth.

The economic data “doesn’t end the headwinds over crude oil demand, the Chinese outlook for 2024 and 2025 is still bleak,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.

“(The) oil industry was backing the notion that, despite a bumpy recovery, oil demand from China has been resilient and will likely reach record levels in 2024.”

Still, China’s oil refinery throughput in 2023 rose 9.3% to a record high, indicating elevated demand even if it lagged some analysts’ expectations.

Other signs of steady Chinese demand have also appeared.

Limiting oil price losses, an optimistic OPEC stuck to its forecast for relatively strong growth in global oil demand in 2024. OPEC said that 2025 will bring a “robust” increase in oil use, led by China and the Middle East.

“The report suggests the market is going to be undersupplied,” said Phil Flynn, an analyst at Price Futures Group.

Meanwhile, the U.S. dollar hovered near a one-month high after comments from Federal Reserve officials lowered expectations for aggressive interest rate cuts. A stronger greenback reduces demand for dollar-denominated oil from buyers using other currencies.

“Higher rates can lead to a weaker outlook for oil demand as economic activity tends to cool in a high interest rate environment, leaving oil prices vulnerable,” Sachdeva said.

In U.S. supply, domestic crude stockpiles were expected to have fallen last week by about 300,000 million barrels, a Reuters poll showed ahead of weekly inventory data from the American Petroleum Institute and government, due on Wednesday and Thursday, respectively.

(Reporting by Stephanie Kelly in New York, Paul Carsten in London, Muyu Xu in Singapore and Colleen Howe in BeijingEditing by Marguerita Choy and David Gregorio)

By Jeffrey Dastin

DAVOS, Switzerland (Reuters) – Bright banners tout the promise of artificial intelligence along the main promenade of Davos, but executives at the World Economic Forum (WEF) say they are grappling with how to turn early demos into money-makers.

The arrival of OpenAI’s viral ChatGPT triggered a frenzy of venture investment and an abrupt change of course inside the world’s biggest technology companies since late 2022.

This year, several CEOs at the WEF meeting in Davos told Reuters that the latest generative AI still has a lot to prove.

Cloud and internet security company Cloudflare CEO Matthew Prince told Reuters that the months ahead may even feel like an “AI letdown”.

“Everyone’s like, yeah, I can build these cool demos, but where’s the real value?” he said, echoing a theme among business leaders attending the WEF meeting.

ChatGPT’s rapid rise is in some ways an outlier.

In the first two months since its November 2022 launch, the chatbot reached an estimated 100 million users, making it one of the fastest growing applications in history.

The program brought so-called generative AI to consumers’ fingertips, letting people write a short prompt and generate a poem, school essay or gather information as if with a search engine. It also proved a good collaborator for developing ideas in “low stakes, not business-critical use cases,” said Victor Riparbelli, CEO of AI video generation startup Synthesia.

But “the enterprise is definitely not really ready” for this chat-based AI, he said in an interview.

One problem Riparbelli cited is there is no clear path to end so-called “hallucinations,” or false content generated by AI. While computer scientists have developed methods for constraining places from which chatbots can draw responses, business leaders may not want the risk.

Other concerns, said IBM’s Europe, Middle East & Africa Chair Ana Paula Assis, are stopping chatbot AI from reproducing human biases, and regulation.

“Clients are still very worried about how they bring those solutions within the boundaries of regulations and compliance,” she said.

Premier Li Qiang of China said in Davos that AI has to serve the common good but must be appropriately governed, because it “poses risks to security and to our ethics.” And China’s President Xi Jinping wants the United Nations to play a central role in AI discussions, U.N. Secretary-General António Guterres said Wednesday.

Meanwhile, some 90% of 1,400 C-suite executives said they were waiting for generative AI to take a step beyond recent hype or were doing only limited experimentation and pilots, survey results published by consultancy BCG showed.

Big tech companies including Microsoft, Alphabet’s Google and Amazon.com have pressed ahead, courting thousands of businesses to give the latest AI a try.

Some have marketed message-drafting, meeting-summarizing AI as a way to save employees time. Google, which has long used AI in its products, is experimenting with a chatbot-like collaborator it calls Bard.

And Microsoft CEO Satya Nadella said at a company event in Davos Wednesday that AI is poised to grow productivity and potentially accelerate science itself.

Yet businesses’ revenue and profit from recent efforts remain unclear.

‘GET REAL ABOUT AI’

While one Davos sign exhorted passers-by, “Let’s get real about AI,” efforts to find a market for it have led developers to consider diverse places.

Cohere, a high-profile AI startup that is focused on enterprises, views helping salespeople as one revenue path.

“It’s going to be on the sales side and making sales teams more productive,” Cohere CEO Aidan Gomez told Reuters. The hope would be “helping them do more outreach, more follow-ups, and automating a lot of that process.”

By contrast, medicine is more complicated. While speeding up note-taking for doctors is a worthy task for AI, automating the medical profession is not, as this could risk lives, said Gomez.

“We should be focused on assisting humans, not replacing doctors and having a chatbot doctor,” Gomez said.

Novartis CEO Vasant Narasimhan said the drugmaker was working with Microsoft with the aim of more widely rolling out AI to give samples to staff who submit 20 to 30,000 regulatory responses a year. The “next opportunity,” he said at Microsoft’s event, would be AI for drug design.

Tejpreet Chopra, CEO of BLP Group, a major wind and solar operator in India, told Reuters he is ready to incorporate AI chat technology “but only for internal use for writing good English, not for content.”

Elections are a high-stakes area concerning AI companies, as voters around the world head to the polls in 2024.

Regarding the use of AI in misinformation campaigns, Gomez said Cohere’s policies prohibit impersonation, while Riparbelli said Synthesia does not allow customers to make political content through its AI video platform.

OpenAI, which also bans abusive impersonation through its technology, on Monday said it is working with the National Association of Secretaries of State in the U.S. and will start directing users to CanIVote.org for election-related questions.

Understanding how content is created is a key concern among companies and policymakers, said Arati Prabhakar, director of the White House Office of Science and Technology Policy.

“If (people) see a video or an image, they should be able to know whether it is AI-generated or human generated,” Prabhakar told Reuters in an interview.

For Srini Pallia, an executive at technology services and consulting company Wipro, the AI buzz at Davos is loud and clear, filling the void left by crypto.

“You know the conversations – it’s AI, AI and more AI,” Pallia said.

(Reporting by Jeffrey Dastin; Additional reporting by Dmitry Zhdannikov and Divya Chowdhury; Editing by Kenneth Li and Alexander Smith)

(Reuters) – Google on Wednesday rolled out an AI-powered feature in the United States that will allow users to search with an image and text simultaneously using their mobile phones.

Users of smartphones such as Pixel 8, Pixel 8 Pro and the new Samsung Galaxy S24 series would be able to use multisearch with gestures without switching apps from Jan. 31, the Alphabet-owned company said at the Samsung Electronics Unpacked event.

Mountain View, California-based Google makes most of its revenue from the online search market. It has been competing with Microsoft for the past year over generative artificial intelligence (AI).

The company said the multisearch feature can be used with its lens camera icon in the Google app for Android & iOS.

(Reporting by Jaspreet Singh in Bengaluru; Editing by Shweta Agarwal)

By Lucia Mutikani

WASHINGTON (Reuters) -U.S. retail sales increased more than expected in December, boosted by motor vehicle and online purchases, keeping the economy on solid ground heading into the new year.

The upbeat report from the Commerce Department on Wednesday, which prompted economists to upgrade their economic growth estimates for the fourth quarter, cast further doubt on financial market expectations that the Federal Reserve would start cutting interest rates in March.

It followed data this month showing strong employment and wage gains in December as well as a pick-up in consumer prices. Fed Governor Christopher Waller on Tuesday described the economy as “doing well,” which he said was giving the U.S. central bank “the flexibility to move carefully and methodically,” in terms on monetary policy.

“Households have continued to weather high interest rates and October’s resumption of student loan payments,” said Will Compernolle, macro strategist at FHN Financial in New York. “While there are some signs of rising distress in credit card delinquencies, we see no strong evidence so far that the economy started 2024 on the verge of a downturn.”

Retail sales rose 0.6% last month after an unrevised 0.3% gain in November, the Commerce Department’s Census Bureau said. Economists polled by Reuters had forecast retail sales gaining 0.4%. Retail sales are mostly goods and are not adjusted for inflation. Sales increased 5.6% year-on-year in December.

The almost broad rise in sales was led by online retailers, where sales advanced 1.5%. Shopping has moved to online and away from the traditional brick-and-mortar retailers, a trend that accelerated during the COVID-19 pandemic.

Receipts at motor vehicles and parts dealers accelerated 1.1%. Sales at building material and garden equipment outlets rose 0.4%. Receipts at sporting goods, hobby, musical instrument and book stores gained 0.3%. Clothing store sales jumped 1.5%.

Sales at food services and drinking places, the only services component in the report, were unchanged. Economists view dining out as a key indicator of household finances.

But sales at electronics and appliance outlets slipped 0.3%, likely the result of discounting. Furniture store sales fell 1.0%. Gasoline station receipts fell 1.3%, as gasoline prices fell about 19 cents a gallon in December, according to data from the U.S. Energy Information Administration.

STRONG CORE SALES

Households have maintained a healthy pace of spending, thanks to a relatively strong labor market. Though spending has cooled from the third quarter’s brisk rate, it has been enough to keep a much-feared recession at bay.

With the Fed expected to start cutting interest rates this year, most economists are confident that the economy will avoid a downturn. The central bank has hiked its policy rate by 525 basis points to the current 5.25%-5.50% range since March 2022.

Excluding automobiles, gasoline, building materials and food services, retail sales jumped 0.8% last month. The so-called core retail sales measure corresponds most closely with the consumer spending component of GDP.

November core sales were revised higher to show them rising 0.5% instead of 0.4% as previously reported. Economists now believe consumer spending, which accounts for more than two-thirds of U.S. economic activity, likely increased at about a 2.7% annualized rate in the fourth quarter. That was up from the around 2.0% pace most estimated before the report.

Growth estimates for the overall economy are currently exceeding a 2.2% rate. The economy grew at a 4.9% pace in the third quarter.

The government is scheduled to publish its first estimate of GDP growth for the October-December quarter next Thursday. Some of the anticipated slowdown in GDP growth will likely reflect smaller inventory accumulation relative to the third quarter’s size.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci)

By Divya Chowdhury and Savio Shetty

DAVOS, Switzerland (Reuters) -Volvo Cars remains confident of “tremendous growth” in the electric vehicles market, CEO Jim Rowan told the Reuters Global Markets Forum in Davos on Wednesday, countering gloomier projections from rivals.

The carmaker, which aims for electric vehicles (EVs) to contribute half its sales volume by mid-decade and to sell only EVs by 2030, said the growth in demand for its premium brand was stronger than that of mass-market rivals.

“We have much more pricing power and people have got more disposable income so they can afford it if they want to drive an EV,” Rowan said.

The Volvo Cars CEO said that, in contrast to others, he saw good growth globally for electric cars, with particular strong demand in Europe.

Over the past year, many automakers have warned that the anticipated growth of EVs has been slow to emerge due to poor demand, heavy price cuts, lower subsidies, and supply chain issues.

Volvo has previously said that it has no intention of participating in the Tesla-ignited price war due to its position as a premium brand and saw good margins on its electric cars.

Higher costs caused by disruptions on shipping in the Red Sea would also not affect customers, the CEO said, who stated that any additional costs would be absorbed by Volvo.

Last week, Volvo said it would halt production at its factory in Belgium for three days as a result of a delivery of gearboxes being delayed due to the disruption.

The CEO also told Reuters that he had high ambitions for India in the next five years with plans to launch the more affordable EX30 there in 2025.

(Join the GMF, a chat room hosted on LSEG Messenger, for live interviews: )

(Reporting by Divya Chowdhury in Davos and Savio Shetty in Mumbai, writing by Marie Mannes, editing by Stine Jacobsen, Terje Solsvik, Elaine Hardcastle)

By Douglas Gillison

(Reuters) -The Biden administration on Wednesday unveiled new draft regulations officials said could save consumers $3.5 billion a year by curbing the fees large banks charge on overdrawn deposit accounts.

The announcement marked the latest effort in U.S. President Joe Biden’s crackdown on the so-called junk fees consumers face across various industries such as housing, tourism, medicine and finance.

Republicans battling for their party’s nomination in this year’s presidential elections have sought to capitalize on a post-pandemic surge in consumer prices to hammer at Biden’s poor public approval ratings on the economy.

Biden in a statement called overdraft fees “exorbitant” charges allowing banks to boost earnings to the detriment of vulnerable wage earners.

“Banks call it a service — I call it exploitation,” he said.

The U.S. Consumer Financial Protection Bureau said the proposed new rule, if adopted, would close a regulatory loophole that had unfairly allowed banks to extend costly credit on undisclosed terms to less wealthy depositors.

At $35, such charges are typically greater than most consumer overdrafts of $26, the agency said.

The agency in recent years has brought several enforcement actions against banks for improper use of overdraft fees.

About 23 million households pay such fees in a given year, with banks bringing in $12.6 billion in 2019. Wells Fargo and JPMorgan Chase & Co together accounting for a third of all such revenue collected by banks above $1 billion in assets in 2022, according to the CFPB.

Lindsey Johnson, head of the Consumer Banker’s Association, on Wednesday called on the CFPB to withdraw the proposal, which she called “politically driven.” She said in a statement that industry use of overdraft fees was already falling and that the burden of new regulation would undo this progress.

The CFPB in a report last month said a quarter of consumer households were charged overdraft fees during the prior month and in most cases this came as a surprise.

The new proposal would apply to banks with more than $10 billion in assets, allowing them to assess fees of between $3 and $14 to recover losses from overdrafts — or more if they can provide cost data to show why this is justified.

The rule would also allow them to offer overdraft loans if they make clear disclosures, such as applicable interest rates, subject to the same regulations governing other forms of consumer credit.

The proposal is now subject to a period of public comment, with officials saying they expect a final version to take effect in late 2025.

(Reporting by Douglas Gillison; Editing by Michael Perry and Mark Porter)

(Reuters) – The Federal Reserve is still seen beginning interest rate cuts in March, though traders became a shade less confident on that start date and on the extent of further rate cuts this year after a U.S. government report Wednesday showed retail sales in December were stronger than expected.

The 0.6% increase in retail sales from the prior month, more than the 0.4% economists had expected in a Reuters poll, suggests upward momentum for household spending and consumer demand that could keep inflation elevated and Fed policymakers hesitant to let up on their restrictive monetary policy stance.

Speaking Tuesday, Fed Governor Christopher Waller said that recent data had made him more confident that inflation is on track to the Fed’s 2% goal, but that consumer spending would be a critical component as he looked to incoming data to confirm that outlook.

Futures that settle to the Fed’s policy rate on Wednesday pointed to a little under a 60% chance of a rate cut in March, versus about a 65% chance seen at the close of business on Tuesday.

The Fed has kept its policy rate in the range of 5.25%-5.5% since July. Rate-futures contracts are now pricing in a year-end U.S. policy rate of around 3.88%, up from 3.83% immediately before the retail sales report.

Fed policymakers themselves have signaled they expect the policy rate to end the year around 4.6%, though Waller on Tuesday said that the extent of the Fed’s actual cuts, and the timing of their start, would depend on the data, especially on inflation.

The Fed next meets in late January.

(Reporting by Ann Saphir; editing by Jason Neely and Chizu Nomiyama)

WASHINGTON (Reuters) – U.S. import prices were unexpectedly unchanged in December after two straight monthly decreases, but the trend in imported inflation remained subdued.

The unchanged reading in import prices last month followed a revised 0.5% decline in November, the Labor Department’s Bureau of Labor Statistics said on Wednesday. Import prices were previously reported to have fallen 0.4% in November.

Economists polled by Reuters had forecast import prices, which exclude tariffs, would drop 0.5% in December.

In the 12 months through December, import prices fell 1.6% after declining 1.5% in November. Annual import prices have now dropped for 11 consecutive months.

The government reported last week that rising shelter and health costs lifted consumer prices in December. Producer prices, however, declined for a third straight month.

Though overall inflation remains above the Federal Reserve’s 2% target, financial markets are betting that the U.S. central bank will start cutting interest rates in March amid some easing in labor market conditions.

Since March 2022, the Fed has raised its policy rate by 525 basis points to the current 5.25%-5.50% range.

Imported fuel prices slipped 0.3%. That followed a 6.4% plunge in November. The cost of imported food dipped 0.1% after rebounding 1.0% in the prior month.

Excluding fuels and food, import prices rose 0.1% after being unchanged in November. These so-called core import prices dropped 1.0% on a year-on-year basis in November.

The monthly increase, if sustained, could be an indication that goods price deflation is running its course. Consumer goods prices edged up in December and were unchanged excluding food and energy after six straight monthly declines.

Prices for imported capital goods fell 0.1% last month, matching November’s drop. The cost of motor vehicles, parts and engines rebounded 0.1% after easing 0.1% in the prior month.

Consumer goods excluding automotives were unchanged for the fourth straight month. Prices of goods imported from China fell 0.1% after declining 0.2% in November. They fell 3.0% on a year-on-year basis in December.

The report also showed export prices fell 0.9% for the third month in a row in December. Export prices for agricultural commodities dropped 0.6% amid lower prices for soybeans and other oilseeds, corn, meat and nuts, which more than offset higher fruit prices.

Nonagricultural export prices decreased 0.9%. Export prices fell 3.2% on a year-on-year basis in December after dropping 5.2% in November.

(Reporting by Lucia Mutikani; Editing by Paul Simao)