PPI Decline Is Biggest Since 2001

U.S. producer prices fell for a fifth-straight month in December on steep declines in energy and food prices, suggesting that inflationary pressures continue to recede rapidly as the economic recession deepens.

Wholesale prices fell 0.9% for 2008 as a whole, the biggest calendar-year decline since 2001, capping a stunning reversal in which the PPI went from near double-digit annual rates to below zero in the space of only four months.

The producer price index for finished goods plunged 1.9% on a seasonally adjusted basis, the Labor Department said, in line with Wall street expectations.

The core PPI, which excludes food and energy, advanced 0.2% last month, slightly above expectations, according to a Dow Jones survey. That was up 4.3% from a year ago, the highest calendar-year increase since 1988.