U.S. Wholesale Costs Rose Last Month On Gas Prices
Falling gas prices through much of 2013 has limited inflation.
Raw material costs have also tumbled, keeping inflation in check for producers. Prices for corn, wheat, soybeans, cane sugar, coal and iron ore have each dropped over the past 12 months. Raw material costs increased in December, but the previous declines suggest that overall inflation should be tame in the months ahead.
Last month Fed officials trimmed the size of their monthly bond purchases $10 billion to $75 billion. But Fed Chairman Ben Bernanke warned that extremely low inflation was a concern. He said that the central bank could continue to pump money into the economy to stabilize inflation at target.
The bond purchases are aimed at lowering long-term interest rates to encourage more borrowing and spending.