(MENAFN- Saudi Press Agency) US producer prices recorded their largest drop in more than five years in January as energy costs continued to fall, the government reported Wednesday, indicating weak inflationary pressure in the near term.
The Labor Department said its producer price index (PPI) fell 0.8 percent, the most since late 2009, after declining 0.2 percent in December. It was the third consecutive decline in wholesale prices, and the January drop was twice as big as economists expected.
In the 12 months ending in January, producer prices were unchanged, the weakest 12-month reading since late 2010.
Wholesale energy prices plunged a record 10.3 percent last month after dropping 6.2 percent in December. It was the sixth consecutive month of declines. Food prices fell 1.1 percent in January, the biggest drop since April 2013, after falling 0.1 percent the previous month.
Core PPI, which excludes volatile energy and food costs, fell a record 0.3 percent in January after rising 0.1 percent the previous month.
Lower energy prices and a strengthening U.S. dollar are reducing already tame inflation pressures.
While the Federal Reserve (Fed), which has a 2-percent inflation target, considers the weak inflationary period as transitory, some policymakers could be concerned that the energy-driven weakness is affecting core inflation.
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