Producer prices fell more than expected in September as inflation is simply nowhere to be found.
Prices received from domestic service and goods fell 0.5% in September against the prior month, according to the latest producer price index.
This was more than the expected 0.2% drop.
Over the prior year, prices fell 1.1%, more than the 0.8% retreat that was expected.
September marked the eighth straight month that year-over-year prices declined.
In a note to clients following the report, Ian Shepherdson at Pantheon Macro noted that the headline number was dragged down by a 5.9% drop in energy prices and a 0.8% decline in food prices.
On a “core” basis, which excludes the more volatile impacts of food and gas, prices fell 0.3% in September compared to the prior month and rose 0.8% compared to the prior year.
Producer prices measure what domestic producers of goods get for their output, often at the first point of sale, and so are seen as measure of overall price inflation at the production, rather than consumption, level of the economy.
Shepherdson added that, “Overall, it’s hard to see an inflation threat in the core PPI, though the margin numbers need to be watched for signs that wholesalers and retailers are seeking to keep some of the input cost declines triggered by the strong dollar for themselves.”