Wholesale Inflation Falls

Prices at the wholesale level fell 0.1 percent in October, the best showing in eight months, as prices for both energy and food fell sharply, the Labor Department said Wednesday.

The decrease in the Producer Price Index, which measures inflation pressures before they reach the consumer, followed a sharp 1.1 percent spike in September, the worst showing in nine years. Many analysts believed that spike was caused by temporary increases in cigarette and car prices, which both rose sharply in September.

October's performance, marking the first drop in wholesale prices since a 0.5 percent decline in February, was better than expected. Many analysts were forecasting that prices would actually rise by 0.1 percent.

However, not counting the volatile energy and food categories, the so-called core rate of inflation at the wholesale level rose a stronger-than-expected 0.3 percent in October. Many analysts were anticipating a 0.1 percent increase in the core rate. In September, the core rate grew by a sharp 0.8 percent.

By Jeannine Aversa
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