Deflation Slows in January

Wholesale prices for finished goods increased in January for the first time in three months, primarily on the strength of energy goods.

Producer prices for food and for most crude and intermediate materials declined but more slowly than in the previous two months, according to a report released Feb. 19 by the Bureau of Labor Statistics of the U.S. Department of Labor.

The Producer Price Index for finished goods rose 0.8 percent in January, seasonally adjusted, BLS said. The increase followed declines of 1.9 percent in December and 2.5 percent in November.  A sharp turnaround in the index for energy goods led the upturn. The energy index jumped 3.7 percent after falling 9.1 percent in December. 

Price declines for finished consumer foods slowed to 0.4 percent in January from 1.4 percent in the preceding month.  The index for finished goods less foods and energy increased 0.4 percent following a 0.2-percent rise a month earlier.

Prices at the earlier stages of processing continued to decline but deflation slowed compared with prior months. Prices for intermediate materials slipped 0.7 percent in January after plunging 4.2 percent in December. The index for crude materials declined 2.9 percent after dropping 5.3 percent in December.