U.S. wholesale prices inched up a tiny 0.1 percent in January, reversing a three-month string of declines, the government said Friday in a report economists said underscored a lack of price pressures in the economy.
While prices charged at the factory door and farm gate grew by 0.1 percent last month, over the 12-month period ending in January they posted the largest drop since President Harry S. Truman was in the White House on the back of a sharp slide in energy prices, the Labor Department said.
Excluding the volatile food and energy sectors, prices eased moderately in January. So-called core wholesale prices actually dropped 0.1 percent, compared to analysts' expectations for a 0.1 percent rise.
"The report was expected to be good and it's actually better than expected," said Carey Leahey, senior U.S. economist at Deutsche Bank Securities. "The market is not looking for inflation this year. Intermediate prices didn't show any movement either. That's a pretty good barometer to finished good prices down the road."
January's slight rise in the Producer Price Index fell short of the expectations of analysts polled by Reuters, who forecast a 0.3 percent increase. It followed a revised decline of 0.6 percent the prior month.
Over the 12 months ending in January, the price index fell 2.6 percent, its biggest drop in over 50 years. The last time the PPI fell by a wider margin over a 12-month period was a 2.9 percent decline ending in February 1950. But excluding energy prices, which plummeted 20.1 percent, producer prices rose 0.6 percent over the 12-month period ending in January.
Gasoline prices rose 3.4 percent after two months of declines. The price of passenger cars rose 0.7 percent following a 0.4 percent drop in December.
In a sign inflation is likely to remain at bay, the prices for intermediate goods, items like lumber and plastic that are used to make other products, fell 0.1 percent after a 0.8 percent drop the previous month.
Prices for crude goods, or raw materials like logs and metal ores, rose 3.7 percent after a 9.6 percent decline the previous month. Crude petroleum prices rose 8.1 percent, the biggest jump since a 9.1 percent climb in September 2000.
The mild increase in wholesale prices comes as the U.S. economy has shown signs of recovering from recession.
Reuters and the Associated Press contributed to this report.