US Oct consumer prices drop slightly, personal incomes rise

16 November 2011 17:50  [Source: ICIS news]

WASHINGTON (ICIS)--Overall US consumer prices dropped by 0.1% in October from September on falling gasoline prices, the Commerce Department said on Wednesday, while its core price index excluding energy and food costs rose by the same percentage.

Meanwhile, other economic reports on Wednesday showed that personal incomes gained slightly for the month and industrial production advanced.

The department said that its closely watched consumer price index (CPI), seasonally adjusted, fell largely because of a 3% decline in retail gasoline prices.

The decline in prices for energy products more than offset a small gain in food costs.

But with both energy and food products backed out of the overall data, the core consumer price index rose by a narrow 0.1% last month, the department said.

The overall 0.1% decline in the CPI for October indirectly helped to raise US workers’ incomes for the month, the department said.

The department’s Bureau of Labor Statistics (BLS) said that real average hourly earnings for all US employees rose by 0.3% in October from the prior month. 

That gain was attributed to the 0.1% decline in consumer prices – which gave workers a bit more spending power – and to a 0.2% increase in the average hourly take-home pay for employees.

The 0.3% advance in real earnings for October marks a welcome change from September’s zero growth and the 0.6% income decline seen in August.  July also had seen no growth in workers’ earnings.

In a separate report, the Federal Reserve Board said that US industrial production grew by 0.7% in October from the month prior, more than offsetting the 0.1% decline recorded in September.

It is the strongest advance in US industrial production since the 1.2% gain in July, and it suggests that the country’s manufacturers are again beginning to increase their output.

For the 12 months ending in October, US industrial production has improved by 3.9%, the central bank said.

However, that 12-month gain in industrial output was not matched by workers’ earnings over the same period, the Commerce Department said.

The department said that from October 2010 to October this year real average hourly earnings for production and nonsupervisory workers fell by 2.2%, seasonally adjusted.

That decline was attributed to more negative numbers in the first half of the 12-month period, including three monthly declines of 0.6% in hourly earnings in December, February and March.

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy

By: Joe Kamalick
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