U.S. wholesale prices increased in January for the first time in four months as rising food costs offset declining gasoline prices, but weak economic growth should keep inflationary pressures constrained, the government reported Wednesday. The Labor Department said its producer price index (PPI), which measures costs before they reach the consumer, gained 0.2 percent last month after dropping 0.3 percent in December. The increase in prices received by farms, factories, and refineries was below the 0.4 percent gain expected by economists. Food prices jumped 0.7 percent last month after a sharp decline in December. Gasoline prices fell 2.1 percent in January after declining 1.8 percent the previous month. However, retail gasoline prices have risen nearly every week so far this year. Excluding volatile energy and food costs, core PPI rose 0.2 percent in January after a 0.1 percent advance the previous month. The rise was in line with analyst expectations. Nothing in the report offered signs of price pressures. In the 12 months ending in January, wholesale prices were up 1.4 percent. In comparison, wholesale prices rose 4.1 percent in the 12 months ending in January 2012. Core PPI has increased 1.8 percent in the last 12 months. Higher wholesale prices do not necessarily mean consumers will soon pay more because high unemployment and weak income gains are making it difficult for retailers to raise prices. The weak inflationary pressure should allow the Federal Reserve (Fed) to maintain its very easy accommodative monetary policy as it attempts to stimulate the economy. The U.S. central bank last year launched a long-term bond-buying program and said it would continue it until it sees a substantial improvement in unemployment.
