Producer Price Index Jumps In December

Jan. 13, 2006
Higher prices for energy pushed the U.S. Labor Department's producer price index (PPI) dramatically higher in December 2005, more than offsetting a sizable decline in November. The department's PPI for finished goods increased nine-tenths of a percentage ...

Higher prices for energy pushed the U.S. Labor Department's producer price index (PPI) dramatically higher in December 2005, more than offsetting a sizable decline in November. The department's PPI for finished goods increased nine-tenths of a percentage point in December, more than twice the four-tenths percent increase economists generally expected and a dramatic reversal of November's seven-tenth percent decrease.

"The December upturn in finished goods prices was led by the index for energy goods, which climbed 3.1% after dropping 4% in the preceding month," the Labor Department said in its Jan. 13 report. "Larger price increases for finished consumer foods and an upturn in the index for capital equipment also contributed to this turnaround," the department added.

One encouraging statistic in the report: The core PPI, which does not factor in price changes for food and fuel, increased just one-tenth of a percentage point in December, half the increase economists were expecting.

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