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Updated: U.S. Producer Price Index Falls 0.1% in September
By Kitco NewsWednesday October 15, 2014 8:30 AM
Editor's Note: Updating earlier story with more details from report, economist reaction
(Kitco News) -Producer prices for finished goods in the U.S. fell for the first time in more than a year in September, declining a seasonally adjusted 0.1%, the Labor Department said Wednesday.
The core index for PPI excluding the volatile food and energy sectors was flat.
Going into the report, expectations had been for a rise of 0.1% in both the headline figure plus the core rate. In August, overall PPI was flat, while core PPI excluding food and energy costs rose 0.1%.
The report listed 0.7% declines for prices of energy and food during September. Excluding these, the producer price inflation would have been up 0.2%, according to the report. Gasoline alone dropped 2.6%.
Unadjusted, the producer price index for final demand rose 1.6% for the 12 months that ended in September, the Labor Department said.
CIBC World Markets said “producer prices fell unexpectedly on the month, and the 1.6% annual rates for both headline and core measures highlight that price pressures remain very subdued, and could ease further with the continued declines in oil prices.”
Earlier this year, the Labor Department unveiled a new producer price index that was the first overhaul of the wholesale inflation gauge since 1978. The new index encompasses goods, services, government purchases, exports and construction and covers roughly three-quarters of the economy, whereas the old PPI was for goods only and represented roughly a third of the economy.
The new index is now referred to as the “producer price index for final demand.” Economists have told Kitco News that the new measuring system should more closely track the consumer price index over time and make it less volatile on a month-to-month basis.
By Allen Sykora of Kitco News; asykora@kitco.com
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