This drop signals further easing in inflationary pressures, as gauges for goods and energy costs both fell.
"Today, we received more evidence that we are making real progress tackling inflation and lowering costs," President Joe Biden said of the Producer Price Index (PPI).
"We are not letting up, and there are even more reasons for optimism this year," he said.
Economist Matthew Martin of Oxford Economics cautioned that "decline to energy overstates the true trajectory of PPI in the months ahead," even if headline inflation will likely continue easing.
"This is wrapped up in more global demand dynamics such as the warmer winter months in Europe as well as uncertainty over China's demand as they attempt to lift Covid restrictions," he told AFP.
Federal Reserve data also showed industrial production plunging 0.7 percent from November to December, a much larger fall than anticipated on the back of energy price declines.
Lower energy costs, a stronger greenback and slowing global economy are taking a collective toll on US manufacturing, economists said.
U.S. Producer Prices Drop in December
The Labor Department said US producer prices fell 0.5 percent in December from November, the biggest drop since early in the pandemic.
WASHINGTON —