Core wholesale inflation rate's 0.1%, both lower than expectations
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) -- Lower costs for energy pushed the U.S. producer price index to drop 0.6% in September, the Labor Department reported Tuesday, in a result that was much lower than analysts' expectations.
Analysts surveyed by MarketWatch had predicted a fall of 0.3% for the month.
Core producer prices, excluding volatile food and energy inputs, fell 0.1% -- also lower than the 0.1% increase expected.
Wholesale prices have fallen in two of the past three months. In August, the headline PPI rate had risen 1.7% on a jump in energy prices, while the core rate had gained 0.2%.
Financial markets were not expected to pay much attention to the report.
The more closely followed consumer inflation index for September rose 0.2% as the core rate also increased 0.2%. See Economic Report.
PPI details
In the 12 months through September, producer prices have fallen 4.8%, as opposed to an annualized drop of 4.3% in August. The index was up 9.8% last July.
Minus food and energy, those prices have climbed 1.8% -- the smallest year-over-year gain since July 2007. The core rate peaked at 4.7% last October.
Energy prices fell 2.4% at the wholesale level in September, the data show. Home heating oil fell 9.8%. Gasoline prices fell 5.4%.
Wholesale food prices eased 0.1% last month. Prices for fresh and dry vegetables sank by 0.4%.
The core index was pushed lower by a 1.4% decline in light motor trucks and a 1.4% drop in pet food, the biggest decline since October 1994.
Prices for intermediate goods rose 0.2% on the month, as metal and chemical prices increased. Excluding food and energy, September's prices for intermediate goods gained 0.9% -- the largest change since July 2008.
Prices for crude goods fell 2.1% and crude energy materials decreased 5.4%.
In other data Tuesday, the Commerce Department said new construction on housing units was essentially flat last month at a seasonally adjusted annual rate of 590,000.
