U.S. Wholesale Prices Show Surprising Jump
By Caren Bohan
WASHINGTON (Reuters) - Soaring food and energy prices pushed up U.S. wholesale prices at their fastest rate in more than two years, the government said Thursday, but inflation in other major sectors remained mild.
...
The core PPI, which strips out volatile food and energy costs, eased by 0.1 percent in January after a 1 percent rise in December. Economists had expected the core index to increase by 0.1 percent.
"I tend to focus on the core measure," Dan Seto, economist with Nikko Securities, told Reuters Television. "What we are concerned about at this stage in the economy is demand-driven inflation and we see no signs of that in the producer price report."
Food and energy prices have been extremely soft over the past year because economic problems in Asia, Russia and Latin America have depressed global demand for farm products, oil and an array of other commodities.
....
Soaring gasoline and heating oil costs helped drive the gain, but costs for residential electric power and natural gas also grew. Helping to offset those strong price gains was a 1.2 percent drop in the cost of passenger cars.
While stressing that the latest PPI data did not set off any inflation alarm bells, some economists said it may be an indication the best news on prices is in the past.
"I think it demonstrates just how important energy has been in the past two years in holding down U.S. inflation," said Paul Kasriel, an economist with Northern Trust Corp. "Although there's still no sign of any meaningful sustained increase in energy prices, all it would take is ... stability in energy prices to ramp up inflation."
ARE WE TALKING ABOUT THE SAME PLANET? HOW CAN HEATING OIL AND GASOLINE HAVE "SOARED" WITHOUT ANYONE NOTICING?
Mike from La.
|
