LITTLE ROCK — Wholesale prices in the U.S. dropped in December for a third month as food costs retreated, capping the smallest annual gain in four years and indicating that there is little risk of a pickup in inflation.

The producer price index fell 0.2 percent after a 0.8 percent decrease the previous month, the Labor Department reported Tuesday. For all of 2012, prices paid by companies climbed 1.3 percent, the smallest advance since a drop in 2008 and compared with an average 3.4 percent gain over the previous decade.

Demand that cooled globally last year from Europe to China helped check input costs for producers. The reduced inflationary pressures mean Federal Reserve policymakers can keep adding stimulus to spur growth and employment without triggering a surge in prices.

“We’re not really seeing any major inflation pressures out there, no matter where you look — labor market, imports, raw material prices,” said Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Fla. “It looks like inflation is still going to be at or below the Fed’s comfort range,” which suggests “they can keep the gas pedal all the way down.”

The core measure, which excludes volatile food and energy prices, rose 0.1 percent for a second month. It increased 2 percent last year rising 3 percent in 2011.

The Fed’s preferred price measure, which is tied to consumer spending patterns, rose 1.4 percent in the 12 months to November, according to data from the Commerce Department.

Central bankers in December adopted a more flexible approach to their interest-rate outlook, saying borrowing costs will stay low “at least as long” as unemployment remains above 6.5 percent and if the Fed predicts inflation of no more than 2.5 percent one or two years in the future. That language replaced an earlier link between the rate outlook and calendar dates. Unemployment was 7.8 percent in December and November.

The drop in the producer price index last month was led by a 0.9 percent decrease in food expenses, the biggest retreat since May 2011. The cost of energy fell 0.3 percent as gasoline prices declined 1.7 percent, the report showed.

The cost of capital goods fell 0.1 percent last month after a 0.2 percent increase in November.

Price pressures were less muted down the production line, according to Tuesday’s data. The cost of intermediate goods increased 0.3 percent. Crude prices climbed 2.5 percent on crude energy materials.

Subdued input costs are good news for businesses reluctant to raise prices.

“For 2013, we expect neutral earnings impact from raw materials,” David Meline, chief financial officer of 3M Co., said during a Dec. 12 conference call. Fifty percent of the cost of goods the St. Paul, Minn.-based manufacturer sells is in raw materials, he said. “The ultimate outcome will be somewhat dependent on the path of economic growth.”

Inventories in the U.S. rose in November at the same pace as a month earlier as companies kept stockpiles in line with improving demand.

The value of goods on hand increased 0.3 percent for a second month, the Commerce Department reported Tuesday. Sales at factories, wholesalers and retailers jumped 1 percent after falling 0.3 percent.

Companies had enough merchandise on hand to last 1.28 months in November, unchanged from October, as they waited for signs of a pickup in Christmas shopping demand along with resolution of the budget debate in Washington.

“It might be the fiscal cliff and uncertainty about this year” that limited stockpiling, Mike Englund, chief economist at Action Economics LLC in Boulder, Colo., said before the report. “Retailers might have in fact been surprised by strengthened sales right at the end of the month.”

Among other reports, the Commerce Department said retail purchases increased 0.5 percent last month after a 0.4 percent gain in November that was more than initially reported.

Information for this article was contributed by Chris Middleton and Shobhana Chandra of Bloomberg News.

Business, Pages 23 on 01/16/2013