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WASHINGTON - Wholesale prices dipped by 0.2 percent in April, led by the biggest drop in food costs in nearly 28 years, The Associated Press reports.
Prices for all food items fell by 3.2 percent, the biggest decrease since June 1974. Prices for vegetables plunged by a record 46.5 percent, due largely to the steep 86.9 percent decline in the costs of lettuce, which resulted from a reduced supply due to bad weather. Prices for eggs, fruit, pork, chickens and beef also went down.
The decline in the Producer Price Index, which measures inflation pressures before they reach consumers, was the biggest in four months and a considerable moderation from the 1 percent jump in March, the Labor Department said.
Excluding volatile food and energy prices, the "core" rate of wholesale inflation nudged up by just 0.1 percent for the second straight month.
The latest PPI reading suggests that prices are remaining well controlled even as the economy bounces back from recession.
"Overall inflation remains quite benign," said Lynn Reaser, chief economist for Banc of America Capital Management. "Companies selling to consumers and businesses have limited pricing power."
Retail gasoline prices have been increasing substantially since the first of the year, although they have leveled off in recent weeks. The average price of regular gasoline this week was $1.40 a gallon, 31 cents cheaper than at the same time a year ago, according to the Energy Information Administration.