Energy prices drive up wholesale costs

NEW YORK: Stabilizing energy prices halted a five-month decline in producer prices last month, the government said Thursday, but inflation remained a remote concern during a deepening recession.

The producer price index, which measures wholesale prices for goods ranging from food to automobiles to children’s toys, rose a seasonally adjusted 0.8 percent in January after months of decline, the U.S. Labor Department reported.

Producer prices excluding volatile food and energy costs rose 0.4 percent.

Gasoline prices jumped 15 percent last month, an indication that a six-month slide in oil prices may have reached its bottom. Crude oil has fallen from its peaks of about $145 a barrel in July as a global economic downturn gained force, but prices have settled around $35 to $40 a barrel since mid-December.

“The sharpest declines at the commodity level seem to be behind us for now,” said Dean Maki, chief United States economist at Barclay’s Capital. “In this environment where the Fed is concerned with deflation, the firm core reading should help to allay some of those fears.”

International Herald Tribune