By Utta Von Nuremburg
WASHINGTON (MNI) – Tuesday morning’s release of the October
Producer Price Index report by the Department of Labor is expected to be
in line with recent industry trends and post its fourth consecutive
monthly gain, if expectations are met and no revisions are made.
A survey of economists by Market News International centered on a
rise of 0.8% in the headline figure, following increases of 0.4% in both
September and August, respectively.
Jim O’Sullivan, global chief economist at MF Global, said in a
telephone interview, “October’s headline figure is expected to be
boosted by another surge in energy and food prices.”
The rise in September’s headline figure was largely driven by
prices for finished consumer foods which advanced 1.2%, after declining
0.3% the month prior. According to September’s PPI release, leading this
advance — and accounting for almost two-thirds of September’s rise was
a 5.2% gain in meat prices, much of which can be traced to a 5.0% jump
in foodstuffs and feeds at the crude goods level.
Prices for finished energy goods climbed 0.5% in September – the
second consecutive monthly increase – driven by a 6.1% increase in the
index for liquified petroleum gas; however, offset by losses in the
indexes for residential natural gas and gasoline.
Stripping out the volatility in the food and energy sectors, core
PPI is expected to post a modest 0.1% rise, following a 0.1% gain in
September which would make it the eleventh consecutive monthly increase.
The rise in September’s core figure was attributed to a 0.6% increase in
prices for light motor trucks.
“Core PPI is expected to remain tame with the caveat that
automotive components can be volatile with a new model year”, O’Sullivan
said.
–Utta Von Nuremburg is an economic reporter with Need to Know News
in Washington
** Market News International Washington Bureau: 202-371-2121 **
[TOPICS: MAUDR$,M$U$$$]
