Tame PPI, CPI Expected for December

The Labor Department’s reports this week on U.S. inflation will probably show little evidence of runaway prices even as investors brace for another Federal Reserve interest rate increase, analysts said. December’s producer price index, due Thursday, probably rose 0.3% after rising 0.2% in November, analysts said. The core rate of the PPI, which excludes food and energy, probably rose just 0.1% for the month. December’s consumer price index, for release Friday, probably rose 0.3% after rising 0.1% in November. The core CPI probably rose 0.2%.

Even a report on import prices, which surged last year along with oil prices, is expected to show a smaller gain. The import price index, a Labor Department report set for release Wednesday, probably rose 0.3% in December after rising 0.5% in November.

Still, new reports that inflation is tame might not be able to overcome Fed concerns about the tight labor market. Fed Chairman Alan Greenspan might drop a hint of Fed intentions when he addresses the New York Economics Club on Thursday night. In testimony last year to Congress, Greenspan expressed concern about worker shortages in many industries. The next meeting of Fed policymakers is Feb. 1-2.

Other reports this week:

* U.S. retail sales, coming in a Commerce Department report Thursday, probably increased 0.9% in December, matching a November gain and reflecting the strongest holiday sales in seven years, analysts said.

* Output at the nation’s factories, mines and utilities increased 0.3% in December, matching a November increase. The Fed is expected to release the report on industrial production Friday.

* Inventories at the nation’s wholesalers, the subject of a Commerce Department report Tuesday, increased 0.5% during November after rising 0.3% the month before.