Posted on 11/16/2010 4:07:54 PM PST by NormsRevenge
WASHINGTON (Reuters) – Core U.S. producer prices recorded their largest fall in more than four years in October and industrial output was flat, underlining concerns at the Federal Reserve about low inflation amid moderate growth.
Economists said the data supported the U.S. central bank's November 3 decision to ease monetary policy further even though the 0.6 percent drop in the core Producer Price Index largely reflected the annual introduction of new motor vehicle models.
Stripping out the sharp declines in vehicle prices, core producer prices -- which exclude volatile food and energy costs -- would have risen by 0.2 percent, the Labor Department said on Tuesday, a modest gain consistent with the economy's sluggish growth trend and tepid domestic demand.
"Today's PPI data shows you that beneath the surface there is not a whole lot of inflation and tomorrow's (consumer price) data is likely to show the same thing," said John Canally, a economist at LPL Financial in Boston.
"The Fed is not going to be proven right with one month of inflation data, but you just need to look around where wage costs are. The PPI data supports what the Fed is doing."
The overall decline in the core index was the biggest since July 2006 and followed a 0.1 percent gain in September. A similar increased had been expected in October.
(Excerpt) Read more at news.yahoo.com ...
ping
a mixed bag of poop is still a bag of poop.. or sumthin’
BS.
Lucky for us gasoline is nothing we produce otherwise that would drop as well.
Lucky on us oil is heading along fiat money hedge
/s
Recovery Summer !
er ah Fall, Winter, ah Spring ?
“which exclude volatile food and energy costs”
I can skip the Godzilla sized 3D LED tv, but I still need to eat once in awhile
They try to get inflation and get deflation. Typical Liberals.
Yeah they want to exclude food as it has risen sharply. Other staples like cleaning products, TP, laundry soaps have gone out the roof.
Not only will seniors on fixed incomes go hungry, they won’t be able to wash their clothes. BUT if you are an ILLEGAL sky’s the limit.
ok, my mother inlaw, a real shopaholic is in the nursing home due to 4 strokes she had during the month of July. My father in law is in for dementia and alzheimers. Maybe that is why things are so darn slow....
These yahoos really do live in alternative universes
Input prices(materials) have gone up drastically. So prices cannot fall without the companies losing money. And if they lose money then they are not long for this world. There are several companies where profits are already way down because of this.
I concur—it is BS.
Vehicle prices didn’t fall - vehicle prices were up.
Every October new model year vehicle prices are assigned a made up correction value that is used to determine if prices are up or down. It’s supposed to correct for changes (both improvements and differing discounts between old and new models) in the new model year cars and trucks. It’s a made up government number. In the PPI all of it hits in October. In the CPI it’s amortized over the entire year.
Vehicle prices were lower than the made up number, so they “fell” in the PPI. In real life - unadjusted, as the economists say - prices were up about 1.5% instead of being down.
Seasonally adjusted government economic statistics aren’t worth the paper they’re printed on - garbage in, garbage out.
Raw material prices are going up, while this happens. More stress to business.
“Though upward pressure from rising commodity prices is starting to show, economists said it was unlikely to feed through to consumer prices in a meaningful way. “
What an absolute pantload. Try to buy anything made of steel or non-ferrous metal. Idiots.
Exactly! Who trusts government statistics? Food prices are going sky high, and they can exclude them from their calculations but I can’t.
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