Producer Price Index, US: January 2015

US producer prices posted a record decline in January, weighed down by plunging energy costs, pointing to very benign inflation pressures in the near term.
The Labor Department said Wednesday its producer price index for final demand dropped 0.8 per cent, the biggest drop since the revamped series started in November 2009, after falling 0.2 per cent in December.

US Producer Price Index: January 2015

In the 12 months through January, producer prices were unchanged, the weakest year-on-year reading since records started in November 2010, after rising 1.1 per cent in December.
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Lower energy prices, against the backdrop of softer global demand and increased shale production in the United States, and a strengthening dollar are dampening domestic inflation prices.

Wholesale energy prices tumbled a record 10.3 per cent in January after sliding 6.2 per cent in December. It was the seventh straight month of declines. Food prices fell 1.1 per cent after falling 0.1 per cent the prior month.

The volatile trade services component, which mostly reflects profit margins, rose 0.5 per cent following a similar gain in December.

A key measure of underlying producer price pressures, which excludes food, energy and trade services, fell a record 0.3 per cent after edging up 0.1 per cent in December.

That suggests that some the energy weakness is spilling over to underlying inflation. This measure had risen 0.9 per cent in the 12 months through December.