WASHINGTON (Reuters) - U.S. producer prices fell more than expected in December as the costs of energy products and food declined, offering more evidence that inflation was receding.
The producer price index for final demand decreased 0.5% last month, the Labor Department said on Wednesday. Data for November was revised lower to show the PPI rising 0.2% instead of 0.3% as previously reported.
In the 12 months through December, the PPI increased 6.2% after climbing 7.3% in November. Economists polled by Reuters had forecast the PPI dipping 0.1% on the month and gaining 6.8% year-on-year.
The report came on the heels of news last week that monthly consumer prices fell for the first time in more than 2-1/2 years in December. Inflation is subsiding as the Federal Reserve's fastest interest rate hiking cycle since the 1980s cools demand for goods. This could allow the U.S. central bank to further scale back the pace of its rate increases next month.
A 1.6% decline in the prices of goods accounted for the drop in the PPI. Goods, which gained 0.1% in November, were pulled down by a 7.9% plunge in energy and a 1.2% drop in food prices.
Services prices edged up 0.1% after rising 0.2% in November.
Excluding the volatile food, energy and trade services components, producer prices gained 0.1% in December. The core PPI advanced 0.3% in November.
In the 12 months through December, the core PPI rose 4.6% after increasing 4.9% in November.