Wholesale Prices Rise 1.6%, Biggest Jump in 13 Years
(but there isn't any inflation)
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
WASHINGTON -- Surging costs for energy, food and equipment boosted wholesale prices last month by the biggest amount in 13 years, putting inflationary concerns back on the table.
Meanwhile, the Conference Board said its index of leading indicators was unchanged in January. In other reports, the U.S. registered another record deficit in December, and jobless claims rose more than expected last week.
The producer-price index climbed 1.6% for finished goods in January, the Labor Department said Thursday. Excluding the volatile categories of food and energy, prices still rose 0.9% -- the biggest increase in four years.
Price increases came in almost all major categories, and the acceleration cast some doubt on economists' assumptions that inflation would stay at bay this year. Economists had expected a much tamer 0.4% increase in the PPI.
Also, inflationary pressures intensified further up the production pipeline. Prices of crude, or unprocessed, goods, surged 6.9%. Prices of intermediate goods rose 1.3%, the biggest increase in more than 12 years.
Energy costs marked the biggest increase since June 2000, with gasoline prices rising 13.7%. Crude-oil prices have risen to well over $30 a barrel this year, up more than 30% from a year earlier. But that likely won't cause a general increase in inflation, Federal Reserve Chairman Alan Greenspan told Congress earlier this month. He called rise in oil costs "war-related."
Food prices, meanwhile, marked the biggest increase in more than six years, rising 1.6%. Prices for capital equipment rose 0.7%, the first increase for that category in months. Passenger cars also grew more costly, but prices for computers dropped again last month.
Trade Gap Hits Record
Separately, the Commerce Department said the U.S. deficit in international trade in goods and services widened to $44.24 billion in December from a revised $40 billion in November, putting all of 2002 at a record.
The December gap -- sharply wider than the $38.5 billion that economists had estimated -- was fueled by a $2.13 billion, or 2.6%, drop in exports. That was the biggest one-month drop since September 2001. At the same time, imports climbed by $2.11 billion, or 1.7%. |
