Like The Herald Business Journal on Facebook!
The Herald of Everett, Washington
Heraldnet.com

The top local business stories in your email

Contact Us:

Josh O'Connor
Publisher
Phone: 425-339-3007
joconnor@heraldnet.com

Jody Knoblich
General Sales Manager
Phone: 425-339-3445
Fax: 425-339-3049
jknoblich@heraldnet.com

Jim Davis
Editor
Phone: 425-339-3097
jdavis@heraldnet.com

Site address:
1800 41st Street, S-300,
Everett, WA 98203

Mailing address:
P.O. Box 930
Everett, WA 98206

HBJ RSS feeds

Wholesale costs fall for 3rd month

SHARE: facebook Twitter icon Linkedin icon Google+ icon Email icon |  PRINTER-FRIENDLY  |  COMMENTS
Associated Press
Published:
WASHINGTON -- U.S. wholesale prices dropped in November for the third consecutive month, pushed down again by cheaper gasoline and lower home heating oil costs. But excluding volatile energy costs, inflation was mostly stable.
The producer price index, which measures prices before they reach the consumer, declined 0.1 percent last month, the Labor Department said Friday. This comes after similar decreases in October and September.
Overall wholesale prices have risen just 0.7 percent in the past 12 months.
Excluding energy and food prices, so-called core wholesale prices increased 0.1 percent in November and 1.3 percent over the past 12 months.
"If you are worried about upside inflation risks, you need to look elsewhere," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Both consumer and wholesale inflation have been running extremely low in the past year. High unemployment and weak wage increases have made it difficult for businesses to raise prices.
Mild inflation has allowed the Federal Reserve more latitude to use its policies to try and stimulate growth. And some Fed officials have raised concerns that inflation is running too low.
Energy costs have kept inflation well below the Fed's 2 percent target. In November, gas costs tumbled 0.7 percent and home heating oil prices plunged 5.7 percent. The costs for new cars also fell 0.8 percent last month.
Consumers are benefiting from cheaper prices, particularly when they fill up their cars and trucks. The average national price for a gallon of gas was just $3.25 on Friday, according to AAA's Daily Fuel Gauge Report.
The costs of raw materials such as corn, wheat, cane sugar, coal and iron ore have each fallen over the past 12 months. Those declines suggest that inflation should be held in check in the months ahead.
Wholesale food prices were flat last month. Pork costs increased 5.6 percent, but the wholesale prices for bread rolls, muffins, bagels and croissants fell 4.2 percent after a sharp rise in October.
The Fed has said it will keep the short-term interest rate it controls at nearly zero at least until the unemployment rate falls below 6.5 percent and as long as inflation isn't expected to rise above 2.5 percent at an annual rate in the near future. The unemployment rate fell to 7 percent in November.
Low inflation has also allowed the Fed to continuing buying bonds to try and lower long-term interest rates.
Fed officials meet on Tuesday and Wednesday to evaluate their interest rate policies.
Story tags » Wholesale

MORE HBJ HEADLINES

CALENDAR

Share your comments: Log in using your HeraldNet account or your Facebook, Twitter or Disqus profile. Comments that violate the rules are subject to removal. Please see our terms of use. Please note that you must verify your email address for your comments to appear.

You are logged in using your HeraldNet ID. Click here to update your profile. | Log out.

Our new comment system is not supported in IE 7. Please upgrade your browser here.

comments powered by Disqus

Market roundup