US producer prices recorded their largest increase in six months in December as the cost of gasoline rebounded strongly, but inflation pressures remained benign.
The Labor Department said yesterday its seasonally adjusted producer price index rose 0.4 per cent last month, the biggest rise since June, after slipping 0.1 per cent in November.
December’s rise in prices received by the nation’s farms, factories and refineries ended two straight months of declines and matched economists’ expectations.
In the 12 months through December, producer prices increased 1.2 per cent after advancing 0.7 per cent in November.
Wholesale prices excluding volatile food and energy costs increased 0.3 per cent, the biggest gain since July 2012, after ticking up 0.1 per cent the prior month. However, tobacco accounted for nearly half the increase.
In the 12 months through December, the so-called core PPI rose 1.4 per cent after increasing 1.3 per cent in November.
US Treasury debt prices fell on the report, while US stock index futures and the dollar were little changed.
A separate report showed manufacturing activity in New York state jumped to its highest level in 20 months in January as new orders soared.
The New York Federal Reserve’s ‘Empire State’ general business conditions index rose to 12.51 in January from a revised 2.22 in December to hit its highest since May 2012.
Economists polled by Reuters had expected a reading of 3.75.