Thursday, January 15, 2015

Producer Prices Fell 0.3% in December Led by Oil Price Drop

Producer prices continued to drop in December, pulled lower by falling oil prices. The decline was the largest in three years, and prices have now fallen in four of the last five months. Prices have now risen just 1.1% over the past 12 months, down from 1.4% reported in November.

Energy prices were the key factor in the decline, with the energy index falling 6.6% over the month. This is no surprise as oil is trading under $50 per barrel, a decline of more than 50% from mid-summer.

Food prices also fell slightly in December, dropping 0.4%. Despite these declines, core goods performed better than expected, rising 0.2% over the month. Final demand, excluding food, energy, and trade was up 0.1%

Read the BLS report.

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