Producer Prices Rose by 0.4% in October for the Second Straight Month

The Bureau of Labor Statistics said that producer prices for final demand goods and services rose by 0.4 percent in October for the second straight month. For manufacturers, producer prices for final demand goods were up by 0.2 percent for the third consecutive release. The gain in October stemmed largely from an acceleration in food prices, up 0.5 percent and its fastest monthly increase since June. On the other hand, energy costs were unchanged in October following robust hurricane-related gains in both August and September. On a year-over-year basis, final demand food and energy costs have risen 2.6 percent and 7.6 percent, respectively. Excluding food and energy, producer prices for final demand goods were up by 0.3 percent in October.

Overall, producer prices for final demand goods and services have increased 2.7 percent since October 2016, up from 2.5 percent year-over-year last month and a pace not seen since February 2012. Raw material costs have accelerated over the course of the past 12 months, as the year-over-year rate was 1.2 percent one year ago. Nonetheless, core producer prices – which exclude food, energy and trade services – continue to be modest at 2.2 percent, up from 2.1 percent in September. For comparison purposes, core producer prices were 1.6 percent year-over-year in October 2016.

Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM) and the Director of the Center for Manufacturing Research for The Manufacturing Institute, where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

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