US wholesale prices up 0.3% in OctoberTuesday 17 November 2009 14.02
US producer prices rose 0.3% in October, government data showed today, highlighting tame inflation at the wholesale level.
The Labor Department's producer price index (PPI) was driven by higher energy and food costs, which both jumped 1.6% in the month. Excluding food and energy, the core PPI was down 0.6%.
Analysts had expected a 0.5% rise in the headline index and a 0.1% increase in core prices.
The drop in core prices - sometimes seen as a better indicator of inflation trends - is a rare occurrence, and October's decline was the sharpest since July 2006, the Labor Department said.
Over 12 months, wholesale prices have fallen 1.9% overall, with the core index showing a scant 0.7% rise.
The trend of flat or declining prices is a mixed blessing for the economy. It allows the Federal Reserve to keep rates low to help lift the economy out of its sluggish, but also suggests potentially crippling deflationary spiral that can harm recovery efforts.