Updated from 11:36 a.m.

A slew of economic data were released Thursday, with wholesale prices posting their biggest dive in 56 years.

The producer price index fell 1.9% in April, its largest drop since the government began calculating the index in 1947, the Bureau of Labor Statistics said. The index had risen 1.5% in March. Economists had predicted an April turnaround due to falling oil prices after the war in Iraq. The core index, which excludes volatile food and energy items, fell 0.9%, posting its biggest drop since August 1993.

Some analysts pointed to the historic drop as evidence that the economy may be facing deflation. But Ken Goldstein, an economist at the Conference Board, disagreed. "These numbers are not evidence that deflation is here," he said, pointing out that when the core index is adjusted to remove incentives for automobiles, it is up 0.2%.

Separately, industrial production slowed for the second straight month in April, according to a report released by the Federal Reserve. The nation's manufacturing plants, mines and utilities reduced output by 0.5%, the same drop recorded in March, and factories ran at 72.5% of capacity, their lowest reading since May of 1983.

Meanwhile, manufacturing in the mid-Atlantic region recovered slightly in May, according to an index that measures factory output released by the Federal Reserve Bank of Philadelphia. The index estimates a decline of 4.8 in May compared with a decline of 8.8 in April. Still, this is the third straight month of declines for the index, and May's results were weaker than the forecast of a 2.6 decline. Several economists had raised their estimates after a big jump in the New York Fed's factory survey released earlier on Thursday.

On the job front, initial unemployment claims fell last week, the Labor Department said, but the number of unemployed people receiving benefits a week earlier was the highest recorded since the aftermath of Sept. 11, 2001.

Also, business inventories grew faster than expected in March, according to a report released by the Commerce Department, and business sales grew by 1.8%, their biggest jump since April of 2002.

"The good news here is that the fever is not getting worse. The bad news is that it is still here, and it may not be getting any better," said Goldstein. "The overall message is: Wait until next year."