Tuesday, November 15, 2011

Wholesale Inflation Fell in October

The producer price index, measuring the prices manufacturers and wholesalers pay for goods and materials, fell a seasonally adjusted 0.3% for finished goods in October. This is down from growth of 0.8% in September. Excluding food and energy prices, producer prices were unchanged in October, down from September’s 0.2% core growth.

Within the core, there was a significant weakness in vehicle prices, which fell 1.6%.

The lower reading is consistent with expectations of slowing inflation in coming months. Producer prices have been a forward looking indicator, as prices seen by the manufacturers are passed through to final goods, to the consumer price index measure.

Inflation is expected to continue to moderate throughout the rest of this year and into the beginning of next. Some temporary factors that had pushed prices up are beginning to fade as passenger cars recover from supply chain disruptions seen early in the year.

Read the report.

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