U.S. Producer Price Index Soars; Industrial Production Up Only Slightly

By Agence France-Presse Large increases in food and auto prices drove the U.S. Producer Price Index (PPI) up 0.8% in October, its largest monthly gain since March, the Labor Department said Nov. 14. Excluding food and energy prices, core wholesale inflation rose 0.5%, also the biggest monthly rise since March. Both hikes were bigger than expected by economists, who had generally predicted between 0.1% and 0.2% for the indexes. The PPI rose 0.3% in September and 0.4% in August. Wholesale food prices jumped 2.2% in October, the biggest gain in nearly 20 years, the Labor Department said. Beef prices surged 18.3%, the most since 1974. Food prices are up 8.5% in the past year. Wholesale light truck prices rose 3.4% in October, the most since October 1985. Car prices rose 1.6%. Meanwhile, U.S. industrial production rose only 0.2% in October down from a sharp 0.5% hike a month earlier, the Federal Reserve reported Nov. 14. Wall Street analysts had expected a 0.4% rise for October. The cooling of growth was mainly because of a large fall in auto production and spare parts, which fell 3.8%. Production of consumer goods fell 0.3% and in the mining sector by 0.8%. But gas and electricity production rose 2.0% , the U.S. central bank said. The industrial utilization index rose to 75% in October from 74.9% in September, according to the Federal Reserve's revised figures. Copyright Agence France-Presse, 2003