The Labor Department reports on U.S. producer price inflation in December. The report will be issued Thursday at 8:30 a.m. Eastern.
FALLING PRICES: The expectation is that falling energy prices will contribute to a drop in producer prices of 0.4 percent in December, according to a forecast by data firm FactSet.
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ENERGY DOWN: In November, falling gas and food costs pushed down overall U.S. wholesale prices by 0.2 percent, evidence that cheaper oil worldwide is limiting inflation.
The Labor Department's Producer Price Index measures the cost of goods and services before they reach the consumer. American consumers have been seeing a significant drop in the price they pay for gas at the pump, which has helped to depress consumer prices.
The expectation is that consumer prices in December will show a drop of 0.2 percent. That report will be issued Friday.
In the 12 months ending in November, producer prices have risen just 1.4 percent, the smallest 12-month increase since February.
In November, wholesale prices plunged 6.3 percent, the steepest drop in more than two years while food prices dropped 0.2 percent, led by sharp declines in pork, fresh fruit and dairy products.
Excluding the volatile food and energy categories, core producer prices were unchanged in November and are up 1.8 percent in the past 12 months.
Various inflation measurements show prices rising below the Fed's 2 percent target for inflation. That has given the central bank the leeway to keep a key interest rate at a record low near zero for the past six years in an effort to boost economic growth and lower unemployment.
The Fed in December expressed the belief that it could be "patient" about raising interest rates, reinforcing the view that the Fed's first rate hike is not likely to occur before June.
The Fed on Wednesday issued its latest survey of business conditions around the country and described growth in December and early January as "moderate." The new report took a somewhat more subdued tone about economic conditions than the previous report, underscoring the assessment that the Fed is in no rush to begin raising interest rates.