Prices for finished goods continued their downward trend from 12 months ago although the pace of price declines appears to be slowing, according to the Bureau of Labor Statistics. In addition, the data for October showed smaller than expected gains over September’s data, raising concerns that lower prices may curtail or stall an economic recovery in process.
After last month’s decline of 0.6 percent, the PPI index for finished goods increased 0.3 percent, largely due to higher prices for energy and food. Economists were expecting a 0.5 percent increase. Food and energy prices accounted for the increase: the gasoline index jumped 1.9 percent and food prices rose 1.6 percent, which includes an increase of 24.2 percent for fresh vegetables.
A decline of 0.6 percent in the core index, which excludes food and energy prices, surprised to the downside compared to expectations of a 0.1 percent increase over September’s figures.
Prices for intermediate products still in the pipeline moved up, again, largely due to an increase in energy prices. The price index for crude goods showed the largest jump, increasing 5.4% over September figures, due to price increases across the board.
The PPI index for October fell 1.9 percent (unadjusted) over last October’s index, which met expectations for the month.