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Wholesale Prices Flat in December

January 15, 2003

WASHINGTON (AP) _ Wholesale prices were flat in December as falling prices for cars, computers and telephone equipment offset higher prices for gasoline and other energy products.

The flat reading in the Producer Price Index, which measures prices paid to factories, farmers and other producers, came after wholesale prices fell by 0.4 percent in November, the Labor Department reported Wednesday.

The latest snapshot of wholesale prices continued to show that inflation is not a danger to the nation’s economy, which is struggling to get back to full health after being knocked out by the 2001 recession.

The fact that inflation has remained under control is one of the reasons the Federal Reserve has been able to keep short-term interest rates at low levels in an effort to spur economic growth.

Wednesday’s PPI figures surprised economists. Many were forecasting wholesale prices to go up by 0.3 percent in December from the previous month.

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