USA producer price index (PPI) declined more than expected in September, data released on Wednesday showed. The core index had been expected to tick up by 0.1%.
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Wholesale prices have decreased 1.1 per cent from a year ago, with September marking the eighth straight 12-month decline.
There was a few sign of stabilization. Economists polled by MarketWatch had forecast a seasonally adjusted 0.2% decline. Further, both PCE inflation, and core-PCE inflation, which does not consider price changes in energy and food products, have fallen. But the USA central bank held off amid concerns about China’s economy growing at a slower pace and sharp volatility in the US stock market. Service prices fell 0.4%.
Over the prior year, prices fell 1.1%, more than the 0.8% retreat that was expected.
A lack of inflation contributed to the Federal Reserve’s decision last month to refrain from raising USA interest rates. In addition to lower oil prices, price pressures also are being suppressed by a strong dollar, which has gained 17.2 percent against the currencies of the United States’ main trading partners since June 2014, and weak global demand.
The unexpected decrease by the core index came as the index for final demand services slumped by 0.4 percent after rising by 0.4 percent in each of the two previous months.
The Labor Department said nearly half of the drop can be traced to prices for final demand services less trade, transportation, and warehousing, which fell by 0.3%.
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Core producer prices were up by 0.8% year-over-year in September, but that reflects a deceleration from the 0.9% increase seen in the previous month.
