Falling Food, Gas Costs Lower Wholesale Prices
WASHINGTON (AP) -- 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.