WASHINGTON -- Prices paid to factories, farmers and other producers fell as expected in October for the third time in five months as lower energy costs offset a jump in new car prices.
The producer price index declined 0.1 percent last month, while the core rate of the PPI, which excludes often-volatile food and energy costs, was unchanged.
"There's no meaningful inflation out there," said Robert Dederick, a consulting economist at Northern Trust Co. in Chicago. The Federal Reserve "has nipped in the bud what was a worsening of inflation earlier this year," he said.
For the first 10 months of the year, wholesale prices rose at a 1.4 percent annual rate, compared with 1.0 percent in the first 10 months of 1994 and 1.7 percent for all of last year, the Labor Department said.
Home heating oil prices posted the largest decline since January 1992, but food prices showed no change, officials said.
Auto prices rose 0.4 percent, reflecting "quality changes" in 1996 model vehicles.
Economists surveyed by Bloomberg Business News had expected a 0.1 percent decrease in October producer prices, both overall and excluding food and energy. In September, PPI rose 0.3 percent while the core rate increased 0.2 percent.
Separately, the Labor Department said first-time jobless claims rose a larger-than-expected 9,000 last week to a seasonally adjusted 375,000, the highest level since mid-July. In the week before last, claims rose 8,000, originally reported as a 6,000 increase.
While job growth this year hasn't touched 1994's performance, the government's monthly employment reports show that in 1995 U.S. businesses have boosted payrolls by an average of 138,000 a month, or an annual rate of 1.66 million. The economy added 3.5 million jobs in 1994.
With the nation's job creation machinery intact, business managers and investors are focusing on the inflation outlook for indications of where interest rates will go from here.
Credit card delinquency rates rose to 4.33 percent from 4.21 percent on a dollar basis in the most recent monthly period, according to RAM Research Group, a Frederick, Md.-based firm that tracks the industry. Late payments now are at their highest level since November 1993, RAM Research said.
The PPI report said overall prices for raw materials, including crude oil, rose 0.3 percent in October. Producer energy prices, which make up 13.6 percent of the index for finished goods, fell 0.9 percent in October as home heating oil, gasoline and natural gas prices decreased.
Wholesale food prices, which make up another 22.8 percent of the index, held steady for the month as falling vegetable, fruit, fish and poultry prices offset rising costs for beef and pork. Tobacco prices declined 0.2 percent.