Wholesale Prices Fall in September

Washington, DC, Oct. 15, 2008--Wholesale prices for finished goods fell in September on lower fuel costs, in their second consecutive month-over-month decline, but continued to rise compared with the a year ago, according to a report today from the U.S. Department of Labor’s Bureau of Labor Statistics.

The Producer Price Index for Finished Goods (PPI) – a measure of wholesale prices paid to U.S. factories, farmers and other producers – fell a seasonally adjusted 0.4 percent compared with the month before, after falling 0.9 percent in August and rising 1.2 percent in July, in its largest rise since 1981.

The month-over-month decline matched the median estimate from a Bloomberg News survey of 73 economists. (Their September estimates ranged from a 1.5-percent decline in the PPI to a 0.2-percent rise.)

The core PPI excluding food and energy costs rose 0.4 percent – twice the 0.2-percent gain predicted by economists – after rising 0.2 percent in August and 0.7 percent in July.

“Conversely, the rise in the index for finished consumer foods slowed to 0.2 percent in September, from 0.3 percent in the prior month,” the BLS said. The price index for energy goods fell 2.9 percent month-over-month, extending August’s 4.6-percent decline, as prices for residential natural gas fell 8.2 percent and gasoline fell 0.5 percent.

Compared with September 2007, the overall PPI for finished goods advanced 8.7 percent last month, slowing from year-over-year gains of 9.6 percent in August and 9.8 percent in July.

In other year-over-year results, the core PPI rose 4.0 percent, the price of finished consumer foods rose 8.1 percent and the index for finished energy goods rose 22.4 percent.