Share

US wholesale prices fell 0.2 percent in December

Share

WASHINGTON (AP) — U.S. wholesale prices fell last month, dragged down by a steep drop in gas costs, suggesting that inflation will remain tame in the coming months.

The Labor Department said Tuesday that the producer price index — which tracks cost changes before they reach the consumer — fell 0.2 percent in December from the previous month. The drop follows a small 0.1 percent increase in November.

Wholesale prices rose 2.5 percent in December from a year earlier, the same 12-month increase as in November. Excluding the volatile food and energy categories, core prices increased 2.7 percent.

Not all those cost increases at the wholesale level are passed onto American shoppers. The consumer price index increased just 1.9 percent in December from a year earlier, the Labor Department said last week.

The data indicates that inflation is mostly tame, despite steady economic growth and a very low unemployment rate. A strong economy can sometimes push up inflation, which then spurs the Federal Reserve to raise the short-term interest rate it controls in order to slow growth and keep prices in check.

Trending:
NY Governor Kathy Hochul Melts Down After Supreme Court Strikes Down Her State's Unconstitutional Gun Restriction

Fed Chairman Jerome Powell has said the muted inflation figures have allowed the Fed to remain “patient” when it comes to its next interest rate hike. Fed policymakers have forecast two rate hikes this year, after lifting rates four times in 2018.

But recent volatility in the financial markets and concerns about a slowing global economy have led many analysts to predict that Fed policymakers may hold off on lifting rates at all this year.

The Fed’s preferred inflation gauge, a separate index tied to consumer purchases, has increased just 1.8 percent in the past year. That’s below the Fed’s inflation target of 2 percent. The Fed wants some inflation to guard against deflation, a damaging fall in prices and wages.

Wholesale gas prices plummeted 13.1 percent in December, offsetting a 2.6 percent increase in food prices. The cost of fresh fruits and melons soared nearly 50 percent last month, the government said.

The prices of beef, wireless phone plans, and transportation and warehouse services all fell.

The Western Journal has not reviewed this Associated Press story prior to publication. Therefore, it may contain editorial bias or may in some other way not meet our normal editorial standards. It is provided to our readers as a service from The Western Journal.

Truth and Accuracy

Submit a Correction →



We are committed to truth and accuracy in all of our journalism. Read our editorial standards.

Tags:
Share
The Associated Press is an independent, not-for-profit news cooperative headquartered in New York City. Their teams in over 100 countries tell the world’s stories, from breaking news to investigative reporting. They provide content and services to help engage audiences worldwide, working with companies of all types, from broadcasters to brands.
The Associated Press was the first private sector organization in the U.S. to operate on a national scale. Over the past 170 years, they have been first to inform the world of many of history's most important moments, from the assassination of Abraham Lincoln and the bombing of Pearl Harbor to the fall of the Shah of Iran and the death of Pope John Paul.

Today, they operate in 263 locations in more than 100 countries relaying breaking news, covering war and conflict and producing enterprise reports that tell the world's stories.
Location
New York City




Conversation