US companies got a bigger break on inflation at the end of 2022 than they had all year.
The Producer Price Index fell 0.5% in December compared to last month because of a 1.6% decline in the price of goods that producers sell. The price of services in the index rose 0.1%.
Within the goods category, energy fell a whopping 7.9% as global energy markets eased from the shock of Russia’s invasion of Ukraine. Food prices for also fell 1.2%. Even while the index showed a rise in the price of services, it was the smallest rise in the last 12 months.
The decline in producer inflation is the steepest since April 2020, and far beyond the 0.1% drop that economists polled by FactSet had expected. The data is further evidence that inflation has already peaked and is on its way to normalizing.