U.S. wholesale prices rise 0.4 percent in October

U.S. wholesale prices rose by a modest pace of 0.4 percent in October, the fourth straight month increase, reported the Labor Department on Tuesday.

The growth pace of the Producer Price Index (PPI) in the United States was the same as that in September. It was mainly boosted by higher gas costs in October.

Over the past 12 months ended October 2010, wholesale prices advanced 4.3 percent, their twelfth straight year-on-year spike.

Excluding the volatile food and energy sectors, core wholesale prices fell 0.6 percent in October after increasing in each of the prior eleven months.

The department said that the drop in the core index was driven by lower prices for new cars and pickup trucks. Car prices fell by a seasonally adjusted 3 percent, and pickup truck prices fell by 4.3 percent. Both were the biggest drops in about four years.

Gas prices rose by 9.8 percent in October, the most since January. The cost of diesel and home heating oil also rose.

Economists believe that inflation remains subdued at the moment and because of all the downward pressures on wages and prices as a result of the recession.

The Federal Reserve said earlier this month that it will purchase 600 billion dollars in government bonds over the next 8 months in an effort to lower longer-term interest rates and boost the faltering economic recovery.
(Source:XINHUA)