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

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 percent in December. That follows a decline of 0.8 percent in November.

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

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

Bank Rates

Loan Type Graph Rate +/- Last Week
30 Y Fixed Graph 4.12% up 4.00%  
15 Y Fixed Graph 3.14% up 3.00%  
30 Y Fixed Jumbo Graph 4.24% up 4.17%  
5/1 ARM Graph 3.25% up 3.01%  
5/1 Jumbo ARM Graph 3.61% up 3.52%  
Loan Type Graph Rate +/- Last Week
$30K HELOC Graph 4.67% up 4.32%  
$50K HELOC Graph 4.04% up 3.99%  
$30K Loan Graph 5.00% up 4.99%  
$50K Loan Graph 4.36% -- 4.36%  
$75K Loan Graph 4.36% -- 4.36%  
Loan Type Graph Rate +/- Last Week
36 M New Graph 2.70% dw 2.84%  
36 M Used Graph 3.19% dw 3.37%  
48 M New Graph 3.03% dw 3.16%  
48 M Used Graph 2.91% dw 3.00%  
60 M New Graph 3.07% dw 3.17%  
Loan Type Graph Yield +/- Last Week
6 month Graph 0.39% up 0.38%  
1 yr Graph 0.70% -- 0.70%  
5 yr Graph 1.50% dw 1.50%