U.S. Producer Prices Dip 0.2% In December, Slightly More Than Expected

Reflecting steep drops in prices for food and energy, the Labor Department released a report on Friday showing that U.S. producer prices fell by slightly more than expected in December.

The Labor Department said its producer price index for final demand dipped by 0.2 in December after rising by 0.3 percent in November. Economists had expected prices to edge down by 0.1 percent.

The decrease in producer prices was partly due to a steep drop in energy prices, which plunged by 3.4 percent in December after sliding by 0.6 percent in November.

Food prices also showed a notable decrease, tumbling by 1.3 percent in December after rising by 0.3 percent in the previous month.

Excluding food and energy prices, the core producer price index inched up by 0.1 in December following a 0.3 percent increase in November. The uptick matched economist estimates.

The modest increase in core prices in December was partly due to a 0.1 percent increase in prices for services, which came after a 0.5 percent advance in November.

The Labor Department said the higher service prices reflected a 0.4 percent increase in prices for final demand services less trade, transportation, and warehousing.

Compared to the same month a year ago, producer prices were down by 1.0 percent in December, reflecting a slight deceleration from the 1.1 percent drop in November.

The annual rate of core producer price growth slowed to 0.3 percent in December from 0.5 percent in the previous month.

The Labor Department is scheduled to release its more closely watched monthly report on consumer price inflation next Wednesday.