September PPI Dips 0.1%; Core Rate Up 0.1%

WASHINGTON — September PPI was reported down 0.1% and core PPI rose 0.1% (0.0539% unrounded). These produced a 0.3% gain overall and a 1.2% increase in core rates over the year -- modest inflation indicators.

Core was boosted by a 0.9% rise for light trucks and a 0.3% gain in cars (both lower before seasonal adjustment) and a 1.0% increase in cosmetics. But it was cut by a 1.5% slide in pharmaceuticals, a 0.6% decline flooring and drops in some clothing costs.

Food prices fell 1.0% on lower vegetables, beef, poultry, and soft drink costs.

Energy posted a 0.5% gain, and about a third of the gain reflects a 6.0% jump for home heating oil. Natural gas prices also were up.

Intermediate PPI was up 0.1%, Crude was up 0.5% on energy gains. Overall, these are relatively tame prices. 

The PPI report said data collection was completed for September before the government shutdown but analysis and production was delayed, hence the data were not affected. The retail sales report did not reference the shutdown, and its reliability estimates were largely unchanged from prior reports.

For PPI, the Bureau of Labor Statistics will provide on the web a version of its new Final Demand-Intermediate Demand PPI which will take effect in the January 2014 report released in February. It is expected to have little effect on price changes.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

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