Producer Price Jump Tied To Energy Costs
Soaring energy costs drove wholesale prices to a 12-month high in December and the biggest yearly increase since 1990. But excluding energy, there were scant signs of accelerating prices.
The Labor Department said Thursday that when energy costs are removed, its Producer Price Index rose a barely perceptible 0.1 percent in December and just 1.4 percent in all of 1996.
“Obviously it was a fantastic year when you focus on the core measure,” which excludes the volatile food and energy components, said economist Chris Varvares of Macroeconomic Advisers in St. Louis. “Basically we have achieved price stability.”
The energy factor contributed to a 0.5 percent Producer Price Index increase during December and 2.8 percent during the year.
December’s overall increase was the biggest since a 0.6 percent jump a year earlier and the 1996 advance the steepest since a 5.7 percent gain in 1990, at the beginning of the last recession.