A drop in energy costs pulled U.S. consumer prices down last month, but core inflation moved up modestly and housing starts surged, according to data released Wednesday.

The Consumer Price Index fell 0.1 percent in December, driven lower by the largest one-month drop in energy costs since July. However, excluding food and energy, consumer prices moved up 0.2 percent for the third straight month and jumped 3.3 percent last year as the biggest surge in fuel bills in 14 years pushed up inflation at the fastest pace since 2000.

In another report, the Commerce Department said housing starts rose 10.9 percent last month, the biggest jump in more than seven years.

Housing starts rose to a seasonally adjusted annual rate of 2.004 million units in December, surpassing analysts’ predictions, from a 1.807 million pace one month earlier. It was the largest gain since an 11.2 percent rise in September 1997.

For the full year, housing starts rose 5.7 percent to a 1.953 million rate, the slowest pace since 2001.

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