US wholesale prices fall 0.2 per cent in December on sharp drop in food costs - InfoNews

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US wholesale prices fall 0.2 per cent in December on sharp drop in food costs

In this Nov. 20, 2012 photo, fish brought to the dock at the Viking Village fishery in Barnegat Light N.J., sit atop a box of ice. U.S. wholesale prices fell for the third month in a row last month, pushed down by falling food and gas costs. The drop is the latest evidence inflation is tame. The producer price index dropped 0.2 percent in December, the Labor Department said Tuesday. That follows a decline of 0.8 percent in November.(AP Photo/Wayne Parry)
January 15, 2013 - 5:37 AM

WASHINGTON - 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 Labor Department says the producer price index dropped 0.2 per cent in December. That follows a decline of 0.8 per cent in November.

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

Excluding the volatile food and energy categories, core wholesale prices ticked up 0.1 per cent in December. They rose 2 per cent in 2012, below a 3 per cent increase in 2011.

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

News from © The Associated Press, 2013
The Associated Press

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