U.S. wholesale prices jumped in December spurred by sharply higher food and energy prices.

Meanwhile, U.S. industrial production climbed much more than expected during December as a surge in manufacturing output offset a plunge in utilities caused by mild weather.

The producer price index for finished goods rose 0.9% in December, the U.S. Labor Department said today, after rising at a three-decade high of 2% in November. Producer prices fell 1.6% in October.

Core producer prices, which exclude food and energy prices, increased 0.2% in December after climbing 1.3% the previous month, the Labor Department said.

Economists had called for a 0.6% month-on-month increase in the PPI and 0.2% rise in the core rate.

In the 12 months ending in December, overall wholesale prices rose 1.1%. The core number was up 2% compared to a year ago, the largest rise since September 2005.

Producer prices for energy increased 2.5% last month compared to November. Gasoline rose 7.1%. Residential natural gas increased 0.7%.

Food prices jumped 1.7%, the steepest rise since October 2003, due to sharply higher prices for fresh fruits and vegetables that included wholesale strawberry prices more than doubling and green pea prices nearly tripling.


Meanwhile, U.S. industrial production increased 0.4%, the Federal Reserve said today. But output retreated 0.1% in November, revised down from a previously estimated 0.2% increase.

Capacity utilization rose to 81.8% in December. November capacity use was 81.6%, revised from a previously estimated 81.8%. The 1972-2005 average was 81.0%. Economists expected a 0.1% increase in output and a capacity utilization rate of 81.8% in December.

Over the 12 months ending in December, industrial production advanced 3.0%. Capacity use was up 0.5 percentage point from its level of 81.3% in December. Manufacturing production increased 0.7% in December, after remaining flat in November and falling 0.6% in October. For the fourth quarter, manufacturing was down 1.4% from the third quarter. Manufacturing capacity utilization rose to 80.4% from 80.0%.