U.S. January Producer Prices Rise More Than Forecast

[Joanne98]

This should be titled. International cartels raise prices because their monopolies.


Feb. 19 (Bloomberg) -- U.S. producer prices climbed more than forecast in January as companies tried to boost earnings at the start of the year before demand weakened even more.

The 0.8 percent increase in wholesale costs was higher than projected and followed a 1.9 percent drop in December, figures from the Labor Department showed today in Washington. Excluding food and fuel, so-called core prices rose 0.4 percent, also more than anticipated.

Makers of autos, communications gear and pharmaceuticals were among the industries boosting prices last month even as sales slumped. The worsening global recession will likely limit inflation and minutes of the Federal Reserve’s January meeting showed some policy makers saw a threat of broad declines in prices.

“It is doubtful that the price increases will be able to stick given the weakening economy and rising unemployment,” said James O’Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut, who projected wholesale prices would rise 0.9 percent. While “inflation hasn’t collapsed yet, the big concern still is that inflation will fall too much,” he said.

http://www.bloomberg.com/apps/news?pid=20601068&sid=a.KkcgNe2h74&refer=home