Producer prices fall more than expected
Overall measure's biggest drop in 30 months, but prices well contained outside of food and energy.
December 20, 2005: 8:44 AM EST
WASHINGTON (Reuters) - U.S. producer prices fell a larger-than-expected 0.7 percent last month, the biggest drop in 2-1/2 years, according to a government report Tuesday that showed prices well contained outside of the volatile food and energy areas.
The drop in the producer price index, a gauge of prices received by farms, factories and refineries, was the largest since April 2003 and reflected a 4 percent drop in energy costs, which swamped a 0.5 percent gain in food prices, the Labor Department said.
The so-called core PPI, which strips out those volatile costs to provide a better gauge of underlying inflation pressures, edged up just 0.1 percent.
Wall Street economists had expected overall producer prices to drop 0.5 percent, with the core index up 0.2 percent.