A measure of U.S. wholesale prices fell by the biggest amount in 10 months in March as the cost of gasoline fell sharply, the government reported Friday. The Labor Department said its producer price index (PPI) fell 0.6 percent last month, following an increase of 0.7 percent in February. It was the biggest decline since May 2012, and economists expected a much smaller 0.2 percent drop. The March decline reflected a 6.8 percent plunge in gasoline prices, the sharpest drop since November. Overall energy prices fell 3.4 percent, the biggest decline in three years. Food prices rose 0.8 percent. Core PPI, which excludes volatile energy and food costs, rose 0.2 percent in March. Wholesale and consumer inflation have remained mild, apart from sharp swings in gasoline prices. For the 12 months ending in March, wholesale prices are up 1.1 percent, the smallest 12-month increase since last summer. Core inflation at the wholesale level is up 1.7 percent in the past 12 months, the smallest 12-month gain since early 2011. Mild inflation gives the U.S. Federal Reserve (Fed) more latitude to continue with its aggressive policies to spark more economic growth by keeping interest rates near record-low levels.
