Producer Prices Up 0.1% in October

Washington, DC, November 14, 2007--Producer prices advanced by a smaller-than expected 0.1 % in October as prices for energy and light trucks fell, Labor Department data showed on Wednesday, while a key measure of core inflation at the producer level was flat with September.

The October gauge of prices paid at the farm and factory gate was below economists' forecasts for a 0.3% rise after a 1.1% increase in September.

The tame inflation data should offer some comfort to the Federal Reserve, which remains wary of fanning inflation as it deals with slowing growth caused by a deepening housing slump.

U.S. energy producer prices fell 0.8% in October after a 4.1% rise in September, while prices for light trucks, which include slow-selling sport/utility vehicles and pickup trucks, fell 2.7% in October, the biggest decline since a 4.7% fall a year earlier. Passenger car prices rose 1.0%.

Core producer prices, which strip out volatile food and energy costs, were unchanged from September. They had been forecast to rise 0.2% after a 0.1% rise in September.

But core prices excluding cars and light trucks rose 0.2% in October.

On a year-over-year basis, October producer prices were up 6.1%, marking the largest increase since a 6.9% rise in September 2005.

Earlier in the production chain, prices producers received for intermediate goods increased by 0.1 after a 0.4% increase in September, while the crude goods index rose 2.4% after a 0.1% rise the previous month.