Wholesale Prices In U.S. Leap 0.9%

Energy prices major factor in increase.

U.S. wholesale prices jumped 0.9% in December, the Labor Department reported Jan. 17, but analysts said the report does not signal a resurgence in inflation.

The producer price index (PPI) increase was well ahead of the 0.5% rise expected on Wall Street. The core PPI, which excludes volatile food and energy prices, increased 0.2%, ahead of the 0.1% expected by analysts. But analysts said the headline reading was distorted by one-time factors and should not set off an inflation scare.

Over the full year 2006, producer prices rose just 1.1%, the lowest annual total since 2001. Core prices have risen 2.0% in the past year.

A big factor in the overall increase in December was a 2.5% leap in energy prices, including a 7.1% rise in gasoline costs. But these prices have since retreated.

Light truck prices rose 0.7% in December.

"The trend in core producer prices was distorted over the past few months by the volatility in vehicles prices," added Marie-Pierre Ripert at IXIS Corporate and Investment Bank. "The Fed is likely to not read too much in these statistics to assess the inflation risk."

Copyright Agence France-Presse, 2007

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