Prices at the wholesale level in January took their biggest drop in 10 months, falling 0.3 percent in a reflection of sharply lower costs for gasoline and other energy products, the government said Friday.
The Labor Department said the January decline in its Producer Price Index, which measures inflationary pressures before they reach the consumer, followed a smaller 0.1 percent December decline.It marked the first back-to-back declines in wholesale prices since June and July of last year, and it was the biggest drop since a similar 0.3 percent decrease last March.
The news on wholesale prices showed that a weak economy was continuing to keep inflation in check.
However, there have been at least faint glimmers that the economy is turning around. The government reported Thursday that retail sales climbed a surprisingly strong 0.6 percent in January, the biggest jump in eight months, while sales of North American cars and light trucks surged 23.8 percent in early February.
Analysts said these developments offered at least a glimmer of hope that the economy was beginning to turn around, an election-year development that the Bush administration is anxiously anticipating.
For all of last year, wholesale prices actually fell by 0.1 percent, the first annual decline in five years.