The Labor Department reported that producer prices declined in December for the first time in nearly 18 months amid declining costs for services.

The Producer Price Index for final demand fell 0.1% in December, the first time it has slipped since August 2016. Overall, 2017 saw the PPI increase 2.6% after rising 1.7% in 2016.

Inflation is tracked by the Fed to help determine rate-hike decisions. The weak PPI report suggests that the Federal Reserve may have trouble reaching its inflation goals this year. The central bank is hoping that a strong labor market and weakness in the dollar will help push inflation toward its 2% target for the year.  

In addition to the PPI report, U.S. jobless claims also rose during the first week of the year.

U.S. initial jobless claims rose by 11,000 last week, the fourth consecutive week of gains, according to the U.S. Labor Department.

The data are not really an indicator of the strength of the economy since the holiday season often sees volatility during the year-end holidays.

In spite of the increase, last week was the 149th straight week that claims remained below the 300,000 threshold. The current streak is the longest such stretch since 1970.

The number of people receiving benefits after the initial claim fell 35,000 to 1.87 million.

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