The Labor Dept said Tue that its Producer Price Index – a measure of inflation at the wholesale level considered an early read of price trends – rose 0.3% in Oct after failing 0.6% in Sept. Consensus estimates were for an increase of 0.5%.
Core PPI – a measure excluding volatile food and energy prices – fell 0.6%.
In the past year producer prices are down 1.9% while core PPI rose a mere 0.7% marking the smallest increase in more than 5 years.
Food prices rose 1.6% last month driven by increases in eggs, fruit, milk and a 24.2% jump in vegetable prices. Energy costs increased 1.6% lead by a spike in oil from $70 in Sept to a high of $81 before settling at $77/barrel.
Core prices were held in check by falling autos. Light trucks were off 5.2% while passenger cars were off 0.5%
Consumer prices are due on Wed. Forecasts are for a 0.2% increase. Core CPI is forecast at a 0.1% increase.
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