US producer prices fell in December as companies paid less for gasoline and vegetables but a measure of underlying inflation climbed higher, sending mixed signals about inflation pressures in the economy.

The Labor Department said today its seasonally adjusted index for prices received by farms, factories and refineries fell 0.1 per cent.

Excluding volatile food and energy, core producer prices rose 0.3 per cent last month, fueled by a big gain in prices for light motor trucks. It was the biggest rise since July and above economists' expectations for a 0.1 per cent gain.

Energy costs for businesses fell 0.8 percent last month, with gasoline down 2.3 per cent. Food prices fell 0.8 per cent.

That brought the 12-month reading for producer price inflation down to 4.8 per cent, a bigger drop than expected after coming in at 5.7 per cent in November. At the same time, higher core prices - if eventually passed on to consumers by businesses - might make the US central bank more cautious about taking additional steps to help the still-struggling US economy.

Core prices rose 3 per cent in the 12 months through December, up from the previous month.

Investors in US stocks appeared to shrug off the data, with futures rising after sources at the International Monetary Fund said the institution wants to boost its lending facility as the euro zone battles a long-running debt crisis.

About 30 per cent of the month-on-month gain in core prices were due to an increase in prices for light motor trucks, the Labor Department said.Prices in auto sector have been affected in recent months by floods in Thailand that last year disrupted supply chains.

Prices for light trucks rose 0.9 percent last month, the biggest rise since July.

Reuters