Producer prices in the U.S. increased by slightly more than anticipated in the month of October, according to a report released by the Labor Department on Friday.
The Labor Department said its producer price index for final demand rose by 0.3 percent in October after climbing by 0.4 percent in September. Economists had expected prices to inch up by 0.2 percent.
“While the increase in prices was just above expectations, inflation pressures remain muted overall and will lend support to the Fed’s strong accommodative bias,” said Oren Klachkin, Lead U.S. Economist at Oxford Economics.
He added, “High frequency data suggests demand momentum has slowed amid a resurgence in Covid-19 cases, and our inflation outlook remains subdued.”
The bigger than expected increase in producer prices was partly due to a jump in food prices, which surged up by 2.4 percent in October amid a spike in prices for fresh and dry vegetables.
The report said energy prices also climbed by 0.8 percent in October after slipping by 0.3 percent in the previous month, reflecting higher gasoline prices.
Excluding food and energy prices, core producer prices crept up by 0.1 percent in October after rising by 0.4 percent in September. Core prices were expected to edge up by 0.2 percent.
The uptick in core prices came as prices for final demand services rose by 0.2 percent in October following a 0.4 percent increase in September.
Prices for transportation and warehousing services jumped by 1.1 percent, while prices for trade services and final demand services less trade, transportation, and warehousing ticked up by 0.2 percent and 0.1 percent, respectively.
The report also said the annual rate of growth in producer prices crept up to 0.5 percent in October from 0.4 percent in September.
Meanwhile, core producer prices in October were up by 1.1 percent compared to a year ago, reflecting a modest deceleration from the 1.2 percent increase in the previous month.
The Labor Department released a separate report on Thursday showing U.S. consumer prices came in flat in the month of October.
The Labor Department said its consumer price index was unchanged in October after rising by 0.2 percent in September. Economists had expected another 0.2 percent uptick.
Excluding food and energy prices, consumer prices were still flat in October after edging up by 0.2 percent in September. Core prices were also expected to inch up by another 0.2 percent.
Compared to the same month a year ago, consumer prices in October were up by 1.2 percent, reflecting a deceleration from the 1.4 percent growth seen in September.
The annual rate of growth in core consumer prices also slowed to 1.6 percent in October from 1.7 percent in the previous month.
The material has been provided by InstaForex Company – www.instaforex.com
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