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The Journal Gazette

  • Associated Press The Labor Department reported Wednesday that wholesale prices rose 0.2 percent in September, despite food and gas prices actually falling. The declines could lead to cheaper prices for consumers in the coming months.

Thursday, October 11, 2018 1:00 am

US wholesale prices inch higher

Up 0.2% last month as inflation in check despite economy

CHRISTOPHER RUGABER | Associated Press

WASHINGTON – U.S. wholesale prices rose a mild 0.2 percent last month, held down by lower food and energy costs, suggesting that inflation remains in check despite the economy's robust growth.

The Labor Department said Wednesday that its producer price index – which measures inflation before it reaches consumers – rose 2.6 percent compared with a year earlier, the smallest increase since January. Wholesale prices rose in September after two months of flat or declining readings.

Excluding the volatile food and energy categories, core wholesale prices rose 0.2 percent and 2.5 percent from a year earlier.

Inflation has crept higher this year, eroding the value of Americans' paychecks. Yet core prices remain close to the Federal Reserve's target of 2 percent and have yet to show signs of rapid acceleration.

There were signs of rising costs in Wednesday's report: Transportation and warehousing prices rose 1.8 percent, the largest monthly gain in nearly nine years. The increase was mostly driven by higher wholesale prices for airline tickets, which jumped 5.5 percent, the biggest increase in a decade.

Wholesale food costs fell 0.6 percent last month and gas prices dropped 3.5 percent, declines that could lower consumer prices in the coming months.

The Federal Reserve is keeping a close eye on price changes as it monitors the economy for signs of overheating.