Although the U.S. Labor Department's Producer Price Index (PPI) for finished goods continued to rise in October, the rate was not as great as in September. For all finished goods, the PPI rose seven-tenths of a percent last month, less than half September's 1.9% increase.
The news about the core PPI, which excludes price changes for food and fuel, was even better. It declined three-tenths of a percentage point last month, a reversal of its three-tenths percent increase in September.
That, along with lower prices for non-energy consumer goods, heartened Peter Morici, a professor at the University of Maryland's Smith School of Business in College Park. The core PPI and the non-energy consumer goods price indexes are good predictors of future consumer-price inflation, and they suggest it will be tame in the months ahead, he notes. "Gasoline and crude oil prices fell in October and continue to fall in November, and natural gas futures for the heating season continue to moderate. Diesel prices did rise in October but have been falling in November. [And] a warm November bodes well for some moderation in heating costs this winter by extending the stock-building season for natural gas and heating oil."
