U.S. Producer Prices Unexpectedly Decrease Amid Sharp Drop In Gas Prices
On the heels of yesterday’s report showing consumer prices were unchanged, the Labor Department released a separate report on Wednesday showing an unexpected decrease in U.S. producer prices in the month of October.
The Labor Department said its producer price index for final demand fell by 0.5 percent in October after climbing by a revised 0.4 percent in September.
Producer prices were expected to inch up by 0.1 percent compared to the 0.5 percent increase originally reported for the previous month.
The report also said the annual rate of producer price growth slowed to 1.3 percent in October from 2.2 percent in September. Economists had expected the pace of price growth to slow to 1.9 percent.
The unexpected monthly decrease partly reflected a sharp pullback in energy prices, which plunged by 6.5 percent in October after jumping by 3.1 percent in September. Gasoline prices led the way lower, plummeting by 15.3 percent.
The report said food prices also edged down by 0.2 percent in October after advancing by 0.7 percent in the previous month.
Meanwhile, the Labor Department said prices for final demand services were unchanged in October following six consecutive advances.
Prices for trade services slid by 0.7 percent during the month, helping offset a 1.5 percent jump in prices for transportation and warehousing services.
Excluding prices for foods, energy and trade services, core producer prices inched up by 0.1 percent in October after rising by 0.1 percent in September.
The annual rate of growth by core producer prices edged down to 2.9 percent in October from 3.0 percent in the previous month.
On Tuesday, the Labor Department released a separate report showing U.S. consumer prices came in unchanged in the month of October, with a sharp pullback in gasoline prices offsetting a continued increase in shelter prices.
The Labor Department said its consumer price index was unchanged in October after climbing by 0.4 percent in September. Economists had expected consumer prices to inch up by 0.1 percent.
Excluding food and energy prices, core consumer prices edged up by 0.2 percent in October after rising by 0.3 percent in September. Core prices were expected to rise by another 0.3 percent.
The report also said the annual rate of consumer price growth slowed to 3.2 percent in October from 3.7 percent in September. Economists had expected the pace of growth to decelerate to 3.3 percent.
Core consumer prices were up by 4.0 percent compared to the same month a year ago, reflecting the smallest year-over-year increase since September 2021.
The annual rate of core consumer price growth was expected to come in unchanged from 4.1 percent in the previous month.
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