Investing.com -- U.S. factory gate inflation fell back sharply in January, although the decline was exaggerated by the sharp drop in energy prices at the end of 2018.
Producer prices fell 0.1% in the month, the Bureau of Labor Statistics said Thursday. That’s below consensus forecasts for an uptick of 0.1%.
The year-on-year price index fell to 2.0% from 2.5% in January – its lowest level since July 2017.
The figures further underline the loss of inflationary pressure in the economy in recent months that has led the Federal Reserve to put its cycle of monetary policy tightening on hold.
However, the core PPI index, which strips out volatile food and energy components, rose 0.3% on the month and 2.6% on the year – both above expectations.
That suggests that underlying activity is still robust, validating Fed chairman Jerome Powell’s comments last week that the U.S. is currently “in a good place” economically, with low unemployment and still-strong growth.