Trio of Reports Show Increases in Prices, Trade Gap and Joblessness

Government reports on producer prices, the trade balance and initial jobless claims all showed significant increases in their most recent reporting periods.

The producer price index, a measure of inflation and pricing power at the wholesale level, rose 1.6% during January. The core rate, which excludes the prices paid to food and energy producers, rose 0.9% during the month, the Labor Department reported Thursday.

The increase in the PPI was the most since its jumped 1.9% in January 1990, Labor said.

In December, the PPI fell a revised 0.1% and the core rate dipped 0.5% during the month.

Analysts told Bloomberg News that the increase signaled that fears of possible deflation were likely overstated and that some inflationary pressure may be returning to the economy.

The largest contributor to the increase in PPI was energy prices – which skyrocketed 4.8%, the largest increase since June 2000. Gasoline prices rose 13.7%, according to the Labor report, the most since October 2002.

The number of U.S. workers filing for first-time jobless benefits rose 21,000 in the week ended Feb. 15 to 402,000, Labor said in a different report.

The four-week moving average for initial claims, a device used to smooth out the volatility in the weekly statistics, rose to 394,750 from 390,000 the week before.

The Commerce Department said that U.S. consumers purchased more foreign-made goods in December, even as exports declined, resulting in the largest trade gap ever.

During December, Commerce said that imports out-valued exports by $44.2 billion, surpassing the previous record of $40 billion set in November. For all of 2002, the trade gap was $435.2 billion, also a record. The previous annual high was $378.7 billion in 2000.