U.S. wholesale prices recorded their biggest increase in six months in December as fuel costs rose, but inflation pressures remained tame, the government reported Wednesday.
The Labor Department said its producer price index (PPI)-which measures changes in prices received by farms, factories, and refineries-rose 0.4 percent last month, the largest advance since June, after declining for three consecutive months.
Gasoline costs jumped 2.2 percent after two months of sharp declines. Home heating oil costs grew at the fastest pace in 10 months, while diesel fuel prices increased at the fastest rate in nearly four years.
Excluding volatile energy and food costs, “core” PPI increased 0.3 percent in December, the biggest gain since July 2012. However, a one-time jump in tobacco costs accounted for almost half the increase.
For all of 2013, PPI increased 1.2 percent, and core PPI rose 1.4 percent. Both figures are well below the Federal Reserve (Fed) inflation target of 2 percent. Falling gasoline prices through much of 2013 has limited inflation. Raw material costs also have declined, keeping inflation mild.