Economy

September PPI -- From Inflation to Deflation

The U.S. Department of Labor has release the wholesale inflation reading via the Producer Price Index (PPI) for the month of September. The headline reading was -0.1%, versus a Bloomberg consensus estimate for a gain of 0.1%. The core PPI reading, ex-food and energy, was flat at 0.0% in September, versus an expected gain of 0.1%.

Unfortunately, these are not adding to inflation in any meaningful way as the Federal Reserve may be hoping for. Is it a sad day when the market participants actually want higher prices?

Gasoline prices were down 2.6% for the largest drop in about a year and a half. Food prices were down 0.7% at the wholesale level. The PPI at the consumption level, a reading that is touted as most closely following consumer price trends, was down 0.2% in September.

If you go back over the course of a year, PPI was up a total of 1.6% from September of 2013, lower than the 1.8% annual figure from August and lower than the 1.7% figure from July. The Federal Reserve has a 2% inflation target, with an upper band of 2.5% or so.

A slowing China and Europe are continuing to weigh on growth and inflation alike. Some investors may start to wonder if the Federal Reserve will be able to begin raising interest rates as soon as they hoped for late in the first half of 2015.

ALSO READ: America’s Poorest Cities

The #1 Thing to Do Before You Claim Social Security (Sponsor)

Choosing the right (or wrong) time to claim Social Security can dramatically change your retirement. So, before making one of the biggest decisions of your financial life, it’s a smart idea to get an extra set of eyes on your complete financial situation.

A financial advisor can help you decide the right Social Security option for you and your family. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.

Click here to match with up to 3 financial pros who would be excited to help you optimize your Social Security outcomes.

 

Have questions about retirement or personal finance? Email us at [email protected]!

By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.

By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.