US Producer Prices Fall

U.S. producer prices fell slightly in December, reflecting a big drop in energy costs and ending a year in which prices at the wholesale level declined, the government reported Friday, highlighting the continued absence of inflationary pressures.

The Labor Department said its producer price index (PPI), which measures inflation before it reaches consumers, fell 0.2 percent last month after a 0.3 percent increase in November. Over the past 12 months, producer prices have fallen 1 percent.

Core PPI, which excludes volatile energy and food costs, rose 0.1 percent in December. For all of 2015, core inflation at the wholesale level is up a tiny 0.3 percent.

In December, energy prices at the wholesale level fell 3.4 percent, the biggest drop since September. Wholesale food prices also fell, declining 1.3 percent, the largest monthly decrease since last February.
Inflation at the consumer level also has been low this year, with the department’s consumer price index (CPI) up only 0.5 percent in the 12 months ending in November.

While the Federal Reserve (Fed) raised its key interest rate last month, many economists say the absence of inflation pressures may delay future rate increases.