The Labor Department reported on Friday that its wholesale price indicator was unchanged in September, indicating that inflation continues to slow.
this producer price indexA measure of the revenue producers receive from their goods and services was flat for the month and up 1.8% from a year earlier. Economists surveyed by Dow Jones expected monthly growth of 0.1%, following a 0.2% gain in August.
Excluding food and energy, PPI rose 0.2%, in line with expectations.
The report comes a day after the Labor Department reported that the consumer price index, a more widely followed measure of inflation that shows how much consumers actually pay for goods and services, rose 0.2% for the month and was up 2.4% from a year earlier.
The market reaction to the data was muted, with stock futures on Wall Street edging higher and Treasury yields on longer-dated securities rising.
Taken together, the data suggest that inflation has departed from the breakneck pace that peaked more than two years ago, but remains largely above the Fed’s 2% target.
In the PPI, final demand goods prices fell by 0.2%, offsetting a 0.2% rise in services prices. Excluding trade services from the core PPI, the index rose 0.1%.
Deposit servicing costs rose 3%, pushing the services index higher, while wholesale prices for professional and business equipment fell 6.3%.
On the commodity side, a 2.7% decline in energy final demand was the main contributor to the decline. Likewise, the gasoline index fell 5.6%, restraining gains in the commodity index. Diesel prices plunged 17.6%.
Fed officials have expressed confidence in recent days that inflation will return to target levels despite persistently high costs in some areas, including housing, food and vehicle costs. Minutes from the September central bank meeting showed policymakers were divided over the decision to cut the Fed’s benchmark interest rate by half a percentage point.
Most officials said they expected to continue cutting production as long as the data showed. Markets expect the Fed to cut interest rates by a quarter percentage point each at its remaining two meetings this year.
