Wholesale Prices Fall 0.7% in December, but End Year Up 4.1%

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he Labor Department reported Friday wholesale prices declined 0.7% in December, the biggest decline since April 2003, but for the entire year, prices rose the most in 14 years.

he decrease in the producer price index followed a 0.5% gain in November. The core rate, which excludes food and energy, rose 0.1%, the smallest gain since declining in July, after a 0.2% rise.

The index measures inflation pressures before they reach the consumer. A decrease in the PPI could indicate weaker demand for goods, which would mean fewer shipments for trucking companies.

Labor said the 4.1% increase in wholesale prices last year was the biggest since a 5.7% rise in 1990. Core prices rose 2.2% in 2004, the biggest annual increase since a 2.5% rise in 1998.

Energy prices fell 4% last month, the biggest drop since April 2003, after rising 1.8% in November. Gasoline prices dipped 11.1%, the biggest decrease since April 2003.

Prices for capital equipment rose 0.1%, while passenger car prices fell 0.2% and the cost of light trucks fell 0.1%.