WASHINGTON — Producer prices rose 1.1% in December, led by a 3.7% increase in energy goods prices, the Labor Department reported Thursday.
Core prices increased 0.2%, partly due to higher cigarette prices. Economists expected December producer prices to rise 0.8% and core prices, which exclude food and energy, to gain 0.3%, according to Thomson Reuters. Producer prices rose 0.8% in November and gained 4.0% in 2010. Core prices rose 1.3% last year.
Energy prices climbed in December as home heating oil prices spiked 12.3% and gasoline prices jumped 6.4%. However, residential natural gas prices declined 0.3%.
“We view the recent shifts in the core PPI as nothing more than random volatility that often influences this series,” said Michael Moran of Daiwa Capital Markets. “Underlying inflation seems tame, as shown by the net decline in the past few months and the increase of 1.3% in the past year.”