En­ergy el­e­vates pro­ducer prices

Houston Chronicle - - MARKET SUMMARY - By Josh Boak

WASH­ING­TON — Ris­ing en­ergy costs led prices at the whole­sale level to climb 0.4 per­cent in Septem­ber — a bout of in­fla­tion that hap­pened in the wake of Hur­ri­cane Har­vey clos­ing a crit­i­cal num­ber of U.S. gaso­line pro­duc­ers.

The sharp rise is ex­pected to be tem­po­rary as the ef­fects of the hur­ri­cane fade.

The La­bor De­part­ment said Thurs­day that its pro­ducer price in­dex, which mea­sures in­fla­tion pres­sures be­fore they reach the con­sumer, has risen 2.6 per­cent over the past 12 months. Septem­ber’s burst of in­fla­tion is likely the re­sult of oil re­finer­ies shut­ter­ing along the Gulf of Mex­ico due to Har­vey to­ward the end of Au­gust. Gaso­line prices surged 10.9 per­cent in Septem­ber.

The jump in pro­ducer prices is oc­cur­ring af­ter years of sub­dued in­fla­tion. The Fed­eral Re­serve tar­gets a 2 per­cent yearly in­crease in con­sumer prices in or­der to en­cour­age eco­nomic ac­tiv­ity, but the U.S. cen­tral bank has per­sis­tently missed that tar­get for the past five years. The Fed’s pre­ferred mea­sure of in­fla­tion has in­creased just 1.4 per­cent over the 12 months that ended in Au­gust.

“It will take more than one month of stronger gains in these in­fla­tion mea­sures” to con­vince Fed of­fi­cials that “in­fla­tion is com­ing back on a sus­tain­able ba­sis,” said Scott An­der­son, chief econ­o­mist at Bank of the West.

For pro­duc­ers, food costs were un­changed last month. Mo­tor ve­hi­cle costs rose, while com­puter chips fell in price.

A less volatile mea­sure of in­fla­tion, which ex­cludes food, en­ergy and trade ser­vices, rose 0.2 per­cent last month. That mea­sure has in­creased 2.1 per­cent over the past year.

On Wall Street Thurs­day, stock in­dexes re­treated from record highs as re­tail­ers and me­dia com­pa­nies de­clined and in­vestors shrugged at re­ports from a few big banks.

Cloth­ing com­pa­nies and other re­tail­ers fell af­ter women’s cloth­ing com­pany J. Jill slashed its thirdquar­ter forecast.

AT&T had its worst one­day loss since 2008 af­ter it said lost more satel­lite and ca­ble TV sub­scribers in the third quar­ter. Other ca­ble and satel­lite TV com­pa­nies also stum­bled. In­dus­trial com­pa­nies and house­hold goods mak­ers fin­ished higher.

JPMor­gan Chase and Cit­i­group both did bet­ter than an­a­lysts ex­pected in the third quar­ter, but their stocks fell, and so did shares of other banks.

Spokane Spokesman-Re­view

Kevin Moe checks corn near Pasco, Wash. For pro­duc­ers, food costs were flat last month.

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