U.S. Wholesale Prices Unexpectedly Show First Drop Since 2016By
U.S. wholesale prices fell in December for the first time in more than a year on declining costs for services, a potential sign that inflation pressures are easing in the economy, a Labor Department report showed Thursday.
Highlights of Producer Prices (December)
Most of the monthly drop in the PPI reflected a 0.2 percent decline in the cost of services, while goods prices were unchanged. A drop in the index for automotive fuel retailing was a major driver, along with falls in costs for loan services, airline passenger services and apparel retailing.
The PPI excluding food, energy, and trade services, a measure some economists prefer because it strips out the most volatile components, rose 2.3 percent from December 2016 following a 2.4 percent gain.
With inflation still below the Federal Reserve’s target, the PPI report is likely to put additional focus on Labor Department figures due Friday for consumer prices. That will give a better indication of where inflation is headed and how it will factor into the central bank’s deliberations over how fast to raise interest rates in 2018.
- Excluding the volatile categories of food, energy, and trade services, producer costs rose 0.1 percent from the previous month following a 0.4 percent increase
- Energy prices unchanged from the prior month; food costs fell 0.7 percent
- Retail margins for automotive fuels and lubricants fell 10.7 percent; airline passenger services were down 4.3 percent, the most since February 2009
— With assistance by Chris Middleton