Reply #13: Energy prices push Oct. PPI up 0.7%

[UpInArms]

http://www.marketwatch.com/news/story.asp?guid={1455E0FA-D43D-4032-9DEF-F51A326A2278}&siteid=mktw

WASHINGTON (MarketWatch) - U.S. wholesale prices increased a greater-than-expected 0.7% in October as energy prices continued to rise, the Labor Department reported Tuesday.

The core rate of the producer price index, meanwhile, fell 0.3% in October, due to falling prices for autos, trucks, clothing and food. It was the largest decline in core prices in 30 months.

The 0.7% gain in the PPI was much greater than the flat reading expected by economists surveyed by MarketWatch. The 0.3% decline in the core rate was lower than the 0.1% gain expected.

The PPI data will keep the heat on the Federal Reserve to maintain its "measured pace" of increases in short-term interest rates. Fed officials have said inflation remains their greatest concern. Core prices remain well behaved, despite growing pressure in earlier stages of production.

The PPI is now up 5.9% in the past 12 months, down from 6.9% last month. The core PPI has risen 1.9% in the past year, down from 2.6% last month.

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Crude goods prices increased 6.7%, despite a 1.2% decline in basic industrial materials prices. The crude PPI is up 31.5% in the past year.

Energy continued to be the story in October, despite falling gasoline prices. Finished energy prices rose 4.1% in the month.

Prices for wholesale residential electricity soared a record 2.9%, while prices for residential natural gas rose 12.7% and home heating oil prices jumped 12.3%.

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