In September, the Producer Price Index for finished goods rose 0.4 percent for the second straight month. This was the third continuous months of rises in the index. Recent moves in producer prices have largely been dominated be swings in energy prices. Energy product prices rose 1.2 percent in September. Also notable was a significant rise in food prices, particularly meat products which jumped 5.4 percent.
The core index, which does not include energy or food product prices, rose by a lesser 0.1 percent. From a year ago, the core index was up 1.5 percent. Though this is still quite modest producer price inflation, it ties the highest year-over-year increase since September 2009. The top line index, including all finished products, was 4.0 percent higher from a year prior.
These numbers still show little inflation, but inflation looks tame. Because of the tame inflation, people take heart to purchase. Thus, the growth for consumer spending will be a cornerstone of economic growth.
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