Food helps push up pro­ducer price in­dex

Houston Chronicle - - MARKET SUMMARY - By Paul Wise­man

WASH­ING­TON — Prices at the whole­sale level climbed 0.4 per­cent in Oc­to­ber and 2.8 per­cent over the past year, big­gest an­nual jump in more than five years and a sign that an im­prov­ing econ­omy may fi­nally be re­viv­ing in­fla­tion­ary pres­sures.

The La­bor Depart­ment says last month’s in­crease in the pro­ducer price in­dex, which mea­sures in­fla­tion pres­sures be­fore they reach the con­sumer, matched the 0.4 per­cent rise in Septem­ber. The uptick from Oc­to­ber 2016 was the big­gest since Fe­bru­ary 2012. The 12-month in­crease was driven by a 7.6 per­cent jump in en­ergy prices.

But en­ergy prices were un­changed from Septem­ber to Oc­to­ber. Food prices rose 0.5 per­cent in Oc­to­ber, most since June. Ex­clud­ing volatile food and en­ergy sec­tors, whole­sale prices rose 0.3 in Oc­to­ber from Septem­ber.

Pro­ducer prices rose faster than econ­o­mists had ex­pected in Oc­to­ber. Since the Great Re­ces­sion, in­fla­tion has come in con­sis­tently be­low the Fed­eral Re­serve’s 2 per­cent an­nual tar­get. But many econ­o­mists ex­pect price pres­sures to rise as the econ­omy im­proves. Eco­nomic growth has come in at or bet­ter than a healthy 3 per­cent an­nual rate in each of the last two quar­ters, and un­em­ploy­ment has fallen to 4.1 per­cent, the low­est level in al­most 17 years.

On Wall Street Tues­day, en­ergy com­pa­nies led stocks mod­estly lower amid the big­gest drop in crude oil prices since Oc­to­ber.

“There’s this per­cep­tion that there’s a lot of sup­ply wait­ing in the wings, and as prices have moved higher, that’s made the mar­ginal pro­ducer want to come out and just find more oil,” said Eric Freed­man, chief in­vest­ment of­fi­cer of U.S. Bank Wealth Man­age­ment.

Ti­mothy D. Easley / As­so­ci­ated Press

A worker helps as­sem­ble a truck at a Ford plant in Louisville, Ky. Pro­ducer prices rose faster than ex­pected in Oc­to­ber.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.