Wholesale prices moderated in December while industrial production rebounded, just the results the Federal Reserve is hoping to achieve to keep the economic expansion on track. The Federal Reserve reported Wednesday that industrial production rose by 0.4 percent last month following two months of 0.1 percent declines. The increase reflected higher output at factories. Meanwhile, the Labor Department said that its Producer Price Index rose by 0.9 percent in December. That was down sharply from a 2 percent jump in November. The combination of a rebounding economy and moderating inflation is what the Fed has been hoping to achieve with its two-year campaign to raise interest rates as a way to slow growth enough to keep inflation at bay. For the whole year, wholesale prices were up just 1.1 percent, down sharply from the 5.4 percent surge in 2005, reflecting a slowdown in the surge in energy costs. The PPI measures cost pressures before they get to the consumer. Gasoline prices surged to record levels above $3 per gallon last summer, but energy prices have since moderated a bit and that helped to cap the rise in inflation in 2006. For 2006, energy costs were down by 2 percent after having soared by 23.9 percent in 2005. The 0.4 percent rise in industrial production reflected a 0.7 percent advance in output at the nation's factories and a 0.8 percent rise in the category that includes oil drilling. That helped to offset a 2.6 percent drop in utility output, a decline that reflected the unseasonably mild weather in December. The overall wholesale price increase of 1.1 percent in 2006 was the smallest advance since prices actually fell by 1.6 percent in the recession year of 2001. The Federal Reserve pushed interest rates up at 17 consecutive meetings over two years in an effort to slow economic growth enough to restrain inflation pressures. While there had been fears that the central bank had overdone the credit-tightening, recent upbeat reports indicate the economy will achieve the hoped-for soft landing rather than a more severe outcome such as a recession.