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U.S. Producer Prices Rise 0.2% in October From Previous Month

Inflation picked up in October due to higher prices that U.S. companies received for new model cars, beef, pork, pharmaceuticals and electric power.

Inflation picked up in October due to higher prices that U.S. companies received for new model cars, beef, pork, pharmaceuticals and electric power. According to the Labor Department, the producer price index increased 0.2% in October from the previous month. The index measures the cost of goods and services before they reach the consumer. Prices for many products climbed even as wholesale gas costs plummeted 5.8% last month. Automakers contributed to inflation by introducing 2015 car models, while beef prices jumped 6% and pork prices surged 8.1%. The Federal Reserve targets inflation at about 2% to protect against deflation, since falling prices could pull down wages and potentially trigger another recession. At the same time, the Fed target is designed to stop inflation from running so high that it could erode the buying power of consumers and businesses, which could also cause a recession.

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