WASHINGTON -- U.S. wholesale prices held steady in December despite a rebound in energy prices, suggesting that the country's slowing economic growth is making inflation an increasingly remote threat.

Meanwhile, U.S. business inventories climbed for a seventh straight month in November, supported by stock-building in the automobile industry as dealers replenished stocks from strong auto sales over the summer.

The Producer Price Index showed stable prices for the first time in nearly a year as a slump in prices of automobiles, trucks and computers offset a 0.9% increase in energy prices, the Labor Department said Wednesday. The so-called core index, which excludes food and energy items, declined by 0.3% for a second consecutive month.

The numbers surprised Wall Street, which had expected a 0.2% increase in the overall index and a 0.1% increase in the core index, according to a consensus forecast of economists surveyed by Dow Jones Newswires and CNBC.

Economic forecasters say the economy grew only about 1% from October through December, down from 4% in the previous three months. U.S. consumer and business confidence, meanwhile, has been wobbly amid worries that a U.S. war with Iraq could retard the economic recovery.

Inflation, as a result, has ceased to be a near-term worry for investors and policymakers. Wall Street expects the Federal Reserve to leave its key interest rate at its current 41-year low for most of this year. Fed policymakers, for their part, have increasingly expressed worry about the prospect of deflation. The latest PPI report could add to those worries.

The Labor Department said the producer price index reflected declines in most major categories. Prices of capital equipment declined for a second consecutive month, falling 0.4% after a 0.2% drop in November. Prices of durable goods declined 0.8% after a 0.7% decline in November.

Wholesale inventories rose 0.2% in November, while factory inventories fell by 0.3%. The Commerce Department released that information in separate reports earlier this month.

The rise in retail inventories was led by a 1.7% rise in autos and parts and a 1.8% gain in inventories at department stores, which were then getting ready for the holiday-shopping season.

Inventories at furniture and home furnishings businesses were up by 0.3% while inventories at clothing stores increased by 0.7%. Food and beverage inventories rose by 0.6% for the month.

The only decline in the retail-inventory category was a 0.6% drop in inventories at building materials,, garden equipment and supply stores such as Home Depot.

Inventories rose 0.6% on a year-over-year basis in November while sales rose 3.5% during the same period.