WASHINGTON: U.S. producer prices declined again in December 2015, showing inflation remained muted as the Federal Reserve considers further increases in interest rate.
The produce price index (PPI) for final demand decreased 0.2 percent last month, compared to an increase of 0.3 percent in November, the Labor Department reported Friday.
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The decrease in the PPI can be traced to prices for final demand goods, which fell 0.7 percent, while the index of final demand services moved up 0.1 percent.
Excluding the volatile food and energy sectors, the so-called “core” PPI rose 0.1 percent in December, compared to an increase of 0.3 percent in November.
On an unadjusted basis, the PPI fell 1 percent in 2015, after rising 0.9 percent in 2014.
The U.S. Fed last month raised interest rate for the first time in nearly a decade. Despite concerns for the low inflation environment, most of the Fed officials expected that transitory factors that are holding down the inflation, such as low oil prices and a strong U.S. dollar, will abate over time, and diminishing slack in labor and product markets should put upward pressure on inflation as well.
