Core Prices Remain Tame at Wholesale Level

Wholesale inflation picked up in November as energy prices moved higher, but excluding the volatile food and energy sectors, inflationary pressures remained muted in the world’s largest economy.

The Labor Department’s producer price index, which measures prices paid to the nation’s factories, farms and refineries, rose 0.2% in November, following a 0.1% decline the previous month. The gains were driven primarily by higher prices for energy.

Prices of crude goods, or raw materials, were also higher.

Economists said the data offered further evidence that inflation remains benign as the U.S. economy, now in its ninth successive year of growth, edges toward its longest-ever peacetime expansion.

“The magical economy keeps on booming while inflation remains in check,” said economic consultant Joel Naroff.

The closely watched core PPI, which strips out volatile food and energy components, was unchanged after a 0.3% gain in October. Economists had expected the overall PPI to show a 0.2% gain and the core rate to rise 0.1%.

The PPI showed prices for energy were 1.4% higher in November, driven by a 7.5% hike in heating oil prices and a 2.7% jump in residential natural gas prices.

Prices of automobiles were 0.2% higher in November after a 1.1% gain in October, while light-truck prices fell 1.1%.

Prices of capital equipment such as computers and plant machinery dipped 0.1% after a 0.3% gain in October.

The price for crude goods--or raw materials--rose 4% in November after a 1.6% decline the previous month. The gain was spurred by a 9.2% surge in crude oil prices.