Wholesaler prices little changed in August

By Bloomberg News, Special to the BDN
Posted Sept. 14, 2011, at 8:36 p.m.

WASHINGTON — Wholesale prices were little changed in August as costs decreased for energy and automobiles.

The producer price index was unchanged after a 0.2 percent increase in July, Labor Department figures showed Wednesday in Washington. Economists projected no change, according to the median estimate in a Bloomberg News survey. The so-called core measure, which excludes volatile food and energy, rose 0.1 percent, less than forecast.

Slowing growth overseas and domestically is helping restrain raw-material costs, underscoring Federal Reserve Chairman Ben Bernanke view that price gains are “transitory.” Cooling prices make it easier for policy makers to take additional steps when they meet next week to keep the economy expanding.

“Inflation is cooling and that will provide some relief for consumers,” said Mark Vitner, a senior economist at Wells Fargo Securities in Charlotte, N.C., who projected no change in August producer prices. “With inflation seeming to crest, it gives the Fed a freer hand.”

Retail sales in August unexpectedly stagnated as a lack of jobs restrained shoppers, highlighting the risk the economy will stall. The unchanged reading followed a 0.3 percent gain for July that was smaller than previously estimated, Commerce Department figures showed in Washington.

The median estimate for producer prices was based on forecasts from 77 economists. Projections ranged from declines of 0.6 percent to increases of 0.9 percent.

Compared with August 2010, companies paid 6.5 percent more for goods last month, the smallest gain since April, after a 7.2 percent rise in July.

Wholesale prices excluding volatile food and energy costs, were projected to rise 0.2 percent from the prior month, the Bloomberg survey showed. Core wholesale prices climbed 2.5 percent in the 12 months ended in August.

The biggest price gain for tires since April accounted for more than 20 percent of the increase in the core measure, the Labor Department said. Higher costs for radio and television communications equipment also contributed to the gain in the core index. Tire prices climbed 1.4 percent.

Fuel costs fell 1 percent, reflecting declines for liquefied petroleum gas, diesel, heating oil and gasoline, today’s report showed. The cost of finished consumer foods rose 1.1 percent, the most since February, led by eggs and poultry. Processed poultry costs rose the most since August 2006.

Expenses for intermediate goods decreased 0.5 percent from the prior month, the first decline since July 2010, while prices of crude goods rose 0.2 percent.

http://bangordailynews.com/2011/09/14/news/nation/wholesaler-prices-little-changed-in-august/ printed on December 20, 2014