WASHINGTON – A sharp rise in energy prices helped push up U.S. wholesale prices in December, but elsewhere price pressures were well contained, a government report on Wednesday showed.
The Producer Price index (search), which measures prices paid to farms, factories and refineries, rose 0.3 percent last month, the Labor Department (search) said. Stripping out volatile food and energy prices, the index fell 0.1 percent.
Wall Street economists had expected producer prices to rise 0.2 percent with the so-called core rate up just 0.1 percent.
Energy prices climbed 1.8 percent last month, their biggest gain since June, with gasoline prices increasing 5.1 percent.
Food prices, which had fallen 0.3 percent in November, gained 0.2 percent last month as the cost of vegetables spiked up 20.7 percent. That gain, and a sharp rise in the price of fruit, more than offset a 5.6 percent plunge in beef and veal prices and a 2.3 percent decline in pork prices.
For the year as a whole, producer prices rose 4 percent — the biggest gain for any calendar year since 1990. But excluding food and energy costs, wholesale prices were up just 1 percent.
The report showed price pressures building further back in the production pipeline, although those gains have yet to show much spillover to finished wholesale goods or consumer prices.
At the intermediate goods level, prices rose 0.5 percent in December, although so-called core intermediate goods prices rose just 0.1 percent. For all of 2003, core intermediate goods prices gained 2.1 percent.
Crude goods prices continued to show even sharper increases. Last month, they rose 2 percent overall and 3.4 percent stripping out food and energy prices.
Some economists have warned sharp increases in commodity prices are offering an inflation warning sign.