Energy costs post biggest decline in more than three years
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — U.S. wholesale prices fell sharply in November as the cost of gasoline tumbled again, the government said Thursday.
The producer price index dropped a seasonally adjusted 0.8% last month, the biggest decline since May. Economists surveyed by MarketWatch had predicted a 0.5% decrease.
Minus the volatile categories of food and energy, so-called core wholesale prices rose 0.1%. The MarketWatch forecast expected a 0.2% increase.
Lower energy prices — mainly gasoline — accounted for the large drop in wholesale prices last month. The energy index slid 4.6% to mark the biggest decrease since March 2009.
Gasoline prices have fallen two straight months, at both the wholesale and consumer levels, after a late-summer runup.
The cost of food, on the other hand, rose 1.3% last month. That’s the biggest increase in a year and a half.
The cost of vegetables jumped almost 12% and beef and veal climbed 8.2%. Chicken and milk prices also rose.
Food prices are up 2.6% over the past 12 months.
Outside of food and energy, wholesale prices rose last month mainly for transportation goods: autos, trucks and railroad cars and parts.
Intermediate producer prices fell 1.2% in November, while crude prices inched up 0.1%.
Over the past 12 months, overall wholesale costs have risen a mild 1.5%. That’s within the Federal Reserve’s target for inflation. The core rate has climbed somewhat faster at 2.2%.
A measure of whether Americans are paying more for goods and services, the consumer price index, will be released Friday. Economists surveyed by MarketWatch project the CPI dropped 0.2% in November, with gas prices being the main reason.
Jeffry Bartash is a reporter for MarketWatch in Washington.
