Washington, DC, January 17, 2007—Producer prices rose 0.9% in December, led by higher energy and food costs, the Labor Department reported Wednesday.
The core producer price index, which excludes food and energy prices, rose 0.2%.
The increases in wholesale inflation were slightly higher than expected. Economists were expecting a 0.6% gain on the finished goods PPI and a flat reading on the core PPI.
Energy prices surged for a second straight month after falling the three months previous. Energy prices rose 2.5% in December, with wholesale gasoline prices rising 7.1%.
Wholesale food prices rose 1.7%, the largest gain in more than three years. Fresh fruit prices jumped 26.3%, the most in six years, while fresh vegetable prices rose 21.7%.
The PPI rose 1.1% in 2006, little changed from the 0.9% gain in the 12 months ending in November. The PPI rose 5.4% in 2005, as energy prices surged. The core PPI has risen 2% in the past 12 months, up from 1.6% in 2005.
For the first time in several months, vehicle prices had little impact on the PPI in December. Light truck prices rose 0.7%, while car prices fell 0.2%. In November, soaring vehicle prices helped push the PPI up 2% and the core PPI up 1.3%.
