US January PPI down 0.6 pct, core PPI up 0.2 pct; both as expected

BY

US inflation at the wholesale level fell as expected in the latest month, erasing part of the huge price increases over the previous two months, the Labor Department said today.

So-called core inflation, which strips out volatile food and energy prices, rose slightly as expected.

The department s Producer Price Index, which measures inflationary pressures before they reach the consumer, fell 0.6 pct in January, while core inflation rose by 0.2 pct. Both were as expected.

Overall wholesale inflation surged 1.8 pct in November and 0.9 pct in December, while core inflation jumped 1.1 pct in November and 0.2 pct in December.

Producer prices have now risen just 0.2 pct over the past year, compared with a 1.1 pct year-over-year rise in December. Core prices have risen 1.8 pct in the past twelve months, compared to a 2.0 pct annual gain in the prior month.

The drop in wholesale inflation stemmed from a sharp decline in energy prices, which fell 4.6 pct in January, the steepest monthly drop since October.

Within the sector, gasoline prices plunged 13.0 pct, while liquefied petroleum gas fell 10.5 pct in the month and home heating oil prices fell 8.3 pct. Each of those three declines was the sharpest drop since September. Residential natural gas prices fell 1.9 pct, the sharpest decline since October.

Light truck prices fell 1.4 pct in January, the sharpest decline since October.
Intermediate goods, which are partially processed materials, fell 0.7 pct in January, while crude goods fell 6.3 pct.