US producer prices unexpectedly remain unchanged in October from the previous month, signaling that inflation is difficult to gather momentum. The data of the Ministry of Labor shows that lower prices in the service sector overshadow appreciation in goods. The zero growth for US producer prices in October comes after a 0.3% increase in September. The expectations of economists surveyed were to maintain this growth rate.
Sub-index for the service sector reported 0.3% decline, which was due to decrease in prices of investment firms and consultants. Prices of goods increased by 0.4% on a monthly basis, the energy for consecutive month, rising by 2.5%, while food prices rose 0.8%.
On an year-on-year basis, the US producer prices grew by 0.8%, which in turn is the sharpest increase since December 2014.
Basic manufacturing inflation in the US, which excludes food and energy, is negative, prices decreased by 0.2%, once in September rose 0.2%. The year-on-year core inflation amounted to 1.2%.
The US manufacturing output increased for a second straight month in October amid gains in the production of motor vehicles and a range of other goods, suggesting that the battered factory sector was slowly recovering.
Despite signs of improvement, gains in manufacturing output will likely remain modest against the backdrop of a still-strong dollar and sluggish global demand.
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