Wholesale Prices Drop

WASHINGTON (January 15, 2013)--Falling food and gas costs pushed down U.S. wholesale prices last month for the third month in a row, the latest evidence inflation is tame, the U.S. Labor Department said Tuesday.

The Labor Department said the producer price index dropped 0.2 percent in December, after a decline of 0.8 percent in November.

The index measures price changes before they reach the consumer. Wholesale prices rose 1.3 percent in 2012, much lower than the 4.7 percent increase in 2011.

Excluding the volatile food and energy categories, core wholesale prices ticked up 0.1 percent in December.

They rose 2 percent in 2012, below a 3 percent increase in 2011.

Low inflation means consumers have more money to spend, which helps the economy and also gives the Federal Reserve more room to keep interest rates low.


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