WASHINGTON (Reuters) - Producer prices outside food and energy recorded their largest increase in six months in January, but are unlikely to ignite inflation pressures given the slack in the labor market.
The Labor Department said on Thursday its seasonally adjusted core producer price index rose 0.4 percent last month, the largest gain since July, after increasing 0.3 percent in December.
Economists polled by Reuters had expected core PPI to rise only 0.2 percent. In the 12 months to January, core producer prices rose 3.0 after increasing 2.7 percent in December.
But overall prices received by farms, factories and refineries edged up 0.1 percent after dipping 0.1 percent in December.
The rise, which was smaller economists’ expectations for a 0.4 percent gain, reflected declines in food and energy prices.
In the 12 months to January, producer prices increased 4.1 percent, moderating from 4.8 percent December. That was the smallest increase in a year.
The Federal Reserve last month viewed inflation as largely contained and said it expected to hold interest rates near zero at least through late 2014.
But a surprisingly strong run of economic data - from job growth to manufacturing - is raising questions about whether the U.S. central bank can hold off on tightening monetary policy that long.
Wholesale prices outside of food and energy were pushed up by a drugs costs, which accounted for about 40 percent of the increase. Higher prices for light motor trucks and household appliances also contributed.
Passenger car prices fell 0.8 percent after rising 0.5 percent in December.
Reporting by Lucia Mutikani; Editing by Neil Stempleman