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The Labor Department said on Tuesday its
producer price index for final demand increased 0.2 percent,
driven by a jump in prices in the services sector. The PPI had
declined 0.1 percent in September.
Economists had expected prices received by the nation's farms,
factories and refineries to slip 0.1 percent last month. October
also saw the introduction of prices for new motor vehicle
models, which could also have contributed to the unexpected
increase in producer prices last month.
In the 12 months through October, producer prices increased 1.5
percent, the smallest advance since February, after rising 1.6
percent in September.
A broader measure of producer inflation, which excludes food,
energy and trade services, edged up only 0.1 percent after
slipping 0.1 percent in September. It was up 1.6 percent in the
12 months through October.
Last month, prices for services rose 0.5 percent, the largest
rise since July 2013. They had declined 0.1 percent in
September.
In October, energy prices fell 3.0 percent after declining 0.7
percent in September. The cost of energy has now declined for
four straight months, falling in response to spotty global
economic growth.
Fed officials largely view the current low inflation environment
as transitory and believe the likelihood of inflation running
persistently below the U.S. central bank's 2 percent target has
diminished somewhat since early this year.
(Reporting By Lucia Mutikani; Editing by Andrea Ricci) ((Lucia.Mutikani@thomsonreuters.com;
1 202 898 8315; Reuters Messaging:
lucia.mutikani.thomsonreuters.com@reuters.net)
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