U.S Producer Prices Surge 1.1%

Core inflation remains tame

High energy costs pushed up wholesale prices by a sharp 1.1% in September, but core inflation excluding volatile components remained tame, government data revealed Oct. 12. The producer price index (PPI), a measure of inflation at the wholesale level, showed a much steeper gain than the 0.5% expected on Wall Street.

But the core rate, watched closely by economists since it excludes volatile food and energy components, was below the consensus forecast with a 0.2% increase.

Overall energy prices rose 4.1% in September, including an 8.4% jump in gasoline costs. Food prices also rose sharply in September, by 1.5%, which is the largest increase since March of this year.

Producer prices have now risen an unadjusted 4.4% over the past year while core prices are up a more modest 2.0%.

Copyright Agence France-Presse, 2007

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