WASHINGTON (AP) — U.S. producer prices edged up slightly in January as the biggest rise in food costs in eight months offset a further decline in energy prices. The tiny overall increase indicated that inflation pressures remain modest.
The Labor Department said Wednesday that its Producer Price Index rose 0.1 percent in January after having fallen 0.2 percent in December. Over the past year, the PPI, which measures inflation pressures before they reach the consumer, is down 0.2 percent.
Core inflation, which excludes energy and food, rose 0.4 percent in January, the biggest one-month jump in 15 months. Over the past 12 months, core inflation is up 0.6 percent.
FILE - In this Wednesday, Feb. 3, 2016, file photo, Wendell Downing works on a tank to hold sap to be boiled into maple syrup at Limlaw Family Maple Farm in West Topsham, Vt. On Wednesday, Feb. 17, 2016, the Labor Department reports on U.S. producer price inflation in January. (AP Photo/Lisa Rathke, File)
A big drop in energy prices in the past two years and a strong dollar have combined to keep inflation low.
Inflation pressures at the consumer level have also been low. For all of 2015, consumer prices were up just 0.7 percent, the smallest annual increase in seven years.
The Federal Reserve in December boosted a key interest rate after keeping it at a record low near zero for seven years. However, the Fed said further increases will depend on seeing movement toward achieving the Fed's goal of annual price increases of 2 percent. The Fed believes that is the optimal level for inflation and readings below that target raises concerns about the potential threat of deflation.
For January, energy prices fell 5 percent, reflecting big drops in all types of energy. Gasoline prices were down 8.8 percent. The nationwide average for a gallon of gas now stands at $1.71, 55 cents lower than a year ago, according to AAA.
Food costs jumped 1 percent in January with big increases in the cost of fish, beef and vegetables.
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