WASHINGTON - The producer price index for finished goods increased 0.3% in October as core prices dropped 0.6%, the largest drop in three years, the Labor Department reported today.
The decline in core wholesale prices, excluding food and energy, was the second consecutive drop and the largest decline since July 2006. A 5.2% drop in light truck prices accounted for most of the core price decline. Wholesale passenger car prices fell 0.5%.
In October, the Labor Department changes the vehicles that it uses for its price index to account for new-model year passenger cars and light motor trucks.
Economists expected producer prices to increase 0.5% and for core prices to increase 0.1%, according to the median estimate provided by Thomson Reuters.
In September, the PPI was down 0.6%, while the core fell 0.1%.
For the year ended in October, producer prices fell 1.9%, the 11th consecutive month of year-over-year declines. Core prices increased 0.7% for the year.
The Labor Department reports the Consumer Price Index tomorrow. Economists expect consumer prices to increase 0.2% for the month and for core prices to increase 0.1%.
