October US producer prices fall with chemicals

14 November 2006 15:01  [Source: ICIS news]

WASHINGTON (ICIS news)--Overall US producer prices fell 1.6% in October from September on a seasonally adjusted basis, including a more modest 0.4% decline in producer prices for industrial chemicals, the Department of Labor said on Tuesday.

 

However, producer prices for plastic resins and materials gained slightly in October, rising 0.2% compared with September, which had been flat following a 0.9% increase in August.

 

The October decline in producer prices - also known as wholesale prices - for industrial chemicals was more moderate than the 2.5% fall seen in September, suggesting that month’s sharp downturn in wholesale chemicals pricing was not a trend. 

 

Industrial chemicals producer prices had increased 1.3% in August.

 

Overall, the 1.6% drop in producer prices for October was led chiefly by a continuing decline in energy costs, down 5% compared with the sharper 8.4% decline in September. 

 

Wholesale prices for gasoline fell nearly 8% in October. That decline was less precipitous than the 22% price fall for gasoline seen in September.

 

The so-called core producer prices - the measure of all prices minus the more volatile food and energy sectors - fell 0.9% in October, the department said, following a 0.6% gain in September.

 

The decline in both overall producer prices and the core prices measure are seen to encourage the Federal Reserve Board’s policy of holding the line on interest rates.

By: Joe Kamalick
+1 713 525 2653

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