Producer Prices Flat in December

The prices U.S. producers received for their goods remained unchanged in December, but did decline if volatile food and energy prices are removed from consideration, the Labor Department reported Wednesday.

The report came out on the same day that the Commerce Department said that business inventories rose 0.2% and sales grew by 0.3% in November.

The PPI number, analysts said, is a sign that there is little to no inflationary pressure on the U.S. economy, which will allow the Federal Reserve to maintain interest rates at their current 42-year lows, Bloomberg reported.

The so-called “core” PPI, which excludes food and energy costs, fell 0.3% for the second straight month.

Expectations for the PPI figure were off slightly, as economists had projected a 0.3% gain in the overall number and an increase of 0.1% in the core PPI.

Business inventories still remain rather lean, analysts said, and should remain tight until companies see improvements in demand, Bloomberg reported.

The inventory-to-sales ratio, a measure of how long goods sit unsold on store shelves held fast at 1.36 months, Commerce said.