Wholesale Prices Rise 0.3% in December

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he Labor Department said Wednesday wholesale prices rose 0.3% in December, reflecting higher costs for energy products.

The modest increase in December's producer price index followed a 0.3% decrease the month before. The PPI measures prices before they reach store shelves.

Excluding volatile energy and food prices, the "core" index dipped by 0.1% in December for the second month in a row. This indicated that despite the improving economy, inflation remains under control, the Associated Press reported.

However, a prolonged decline in the core index could also show weak demand for goods, which could mean fewer shipments for trucking companies.

In a speech on Tuesday, Federal Reserve Chairman Alan Greenspan said inflation remains subdued even as the dollar has fallen by roughly 25% against major foreign currencies since early 2002.

The increase in the overall PPI was slightly faster than the 0.2% rise that economists were forecasting, Bloomberg said.

Labor said for the 12 months ending December, wholesale prices rose 4%, while core prices went up by just 1% during the same period.

After three month of price declines, energy prices rose by 1.8% in December, the largest increase since June.

Gasoline prices were up 5.1% last month, liquefied petroleum gas, such as propane, increased 10.9%, home heating oil rose 6.4% and residential electric power prices advanced 0.5%.

Food prices rose 0.2% in December, following a 0.3% decline. Higher prices for fruits and vegetables offset lower prices for beef and veal, and pork.

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