Prices for wholesale goods and services fell sharply in December, providing another sign that inflation, while still high, is beginning to ease.
The producer price index, which measures final demand prices across hundreds of categories, declined 0.5% for the month, the Labor Department reported Wednesday. Excluding food and energy, the core PPI measure rose 0.1%, matching the estimate.
For the year, headline PPI rose 6.2%, the lowest annual level since March 2021 and down considerably from the 10% annual increase in 2021.
A sharp drop in energy prices helped bring the headline inflation reading down for the month. The PPI’s final demand energy index plunged 7.9% on the month. Within that category, wholesale gasoline prices fell 13.4%.
The final demand food index also fell, declining 1.2%.
Inflation readings ahead could be less certain, though, as the cost for a gallon of gas is up about 21 cents from this time last month, and crude oil prices have risen about 1.6% so far in January.
Still, the general trend in inflation has been slightly lower. The consumer price index decreased 0.1% in December, though it was still up 6.5% from a year ago – 5.7% excluding food and energy. CPI gauges the prices that consumers pay at the marketplace, while PPI measures what business pay for goods and services.