January 14, 2006	Saturday	Zilhaj 13, 1426

WASHINGTON, Jan 13: A surge in energy costs pushed wholesale prices up 0.9 per cent in December, the government reported Friday. The rise in the producer price index (PPI), an indicator of inflation at the wholesale level, was the steepest since September.

But the “core” PPI index, excluding the volatile food and energy components, rose only 0.1 per cent, according to the Labour Department.

Private economists had expected a 0.4 per cent rise in the headline PPI and a 0.2 per cent increase in the core rate.

For all of 2005, the PPI has risen 5.4 per cent, the largest calendar-year increase since 1990. However, the core rate — a preferred indicator by many economists — moderated in 2005, rising 1.7 per cent in 2005 after a 2.3 per cent gain in 2004.

Energy continued to be the story in December. Finished energy prices rose 3.1 per cent in the month. Most of the upturn was caused by higher gasoline prices, which advanced 12.3 per cent in December after falling 10.7 per cent a month earlier.

Outside of energy, food prices were also strong, rising 0.9 per cent after a 0.7 per cent drop in November.

In the core PPI, rising prices for drugs, newspapers, tires and books slightly outweighed falling prices for cars and trucks and sporting goods.—AFP