Washington, DC, November 16--The producer price index for finished goods rose 1.7% in October, which the biggest increase since January 1990, according to a Labor Department report.
The increase however was mostly due to soaring energy prices. The so-called core index, which excludes energy and food items, rose a moderate 0.3%, the same rate as in September.
Economists were expecting an increase of 0.6% in the overall index and a 0.1% gain in core index.
In annual terms, the growth of core producer prices actually moderated in October -- to a 1.8% rate, from 1.9% in the year through September.
The Labor Department said energy prices rose 6.8% in October, the biggest increase in 20 months. Gasoline prices rose 17.3%, the biggest increase since June 2000. Residential electric power prices registered a 2.3% increase, the biggest in nearly 14 years. Excluding energy items, however, producer prices were up 0.7%.
Food prices also registered a big increase -- a 1.6% gain that was the largest in a year.
Prices of passenger cars dropped 1.3%, the biggest decline in 18 months, as the Labor Department incorporated prices of 2005 models into the price index. Prices of light motor trucks -- which include sport utility vehicles -- rose 2.7%, the biggest increase in a year. Tobacco prices were unchanged.
Inflation pressures intensified farther up the production pipeline. Prices of crude goods rose 4.3%, reversing a 4.2% decline in September. Prices of intermediate -- or semi-processed -- goods rose 0.9% after a 0.1% increase in September.
