The government will issue its October report on consumer prices on Thursday. In September, consumer prices rose 0.6 percent. That gain reflected the big jump in gas prices. Excluding food and energy costs, consumer prices inched up just 0.1 percent in September.The 0.2 percent rise in food prices at the wholesale level in September was the smallest change since prices dropped for two months in April and May. In June, July and August, prices showed larger gains, reflecting in part this year's severe drought in the Midwest. That has raised the price of corn, soybeans and other grains. Corn is used in animal feed and most products found in the supermarket, from cereal to cosmetics. More expensive corn prices can push up beef and pork prices because corn is an ingredient in animal feeds. Gas prices averaged $3.44 a gallon nationwide on Tuesday, down 35 cents from a month ago, according to a survey by AAA's Fuel Gauge.
WASHINGTON (AP) â¿¿ Wholesale price inflation likely slowed in October, reflecting a moderation in energy prices. The forecast is that the producer price index, which measures inflation pressures before they reach the consumer, rose 0.2 percent in October after a 1.1 percent gain in September, according to FactSet. The report will be released at 8:30 a.m. EST Wednesday by the Labor Department. Core inflation, which excludes volatile food and energy, is also expected to have increased just 0.2 percent in October. A sharp increase in gasoline costs over the summer drove wholesale prices higher in September. Gas prices have since come down and other prices have remained stable. The 1.1 percent overall gain in wholesale prices in September followed a 1.7 percent rise in August which had been the largest one-month increase in more than three years. The rise in both months reflected a big jump in gasoline. Core prices, which exclude food and energy, were unchanged in September, the best showing since they held steady in October 2011. In August, core prices rose 0.2 percent. Wholesale inflation has been stable over the 12 months that ended in September. In that time, overall prices have increased just 2.1 percent. Core inflation is up 2.3 percent over the 12-month period. Low inflation means consumers have more money to spend, which helps the economy. It also gives the Federal Reserve more room to keep interest rates low in an effort to spur economic growth. If prices were to begin rising rapidly, the central bank might be forced to raise rates in response. Economists believe that the modest gains in wholesale prices should translate into further moderation in consumer inflation, keeping it close to the Fed's 2 percent inflation target and allowing the central bank to keep focusing its policy on efforts to boost economic growth and reduce the unemployment rate.