Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: patron_anejo_por_favor who wrote (27859)	10/13/2000 9:03:57 AM
From: UnBelievable	Read Replies (1) \| Respond to of 436258

Sept PPI Increase Is Biggest In Seven Months ======================================================= September Producer Price Index !Surprise: Yes! Key Numbers: Sept Aug ! ! PPI Index: +0.9% -0.2% !Trend: More ! Core Index: +0.3% 0.1% ! Inflation ! Intermediate:+0.7% -0.2% !Consensus: ! !Overall:+0.5%! ======================================================= By Joseph Rebello and Phil McCarty Of DOW JONES NEWSWIRES WASHINGTON (Dow Jones)--U.S. wholesale prices surged in September as energy prices rebounded, causing the biggest increase in pipeline inflation in seven months and giving the Federal Reserve no reason to consider cutting interest rates anytime soon. The Producer Price Index for finished goods rose 0.9% after declining in August, the Labor Department said Friday. But the increase was mostly due to a 3.7% increase in energy prices that was the biggest in three months. The core index, which excludes volatile energy and food components, rose 0.3%. Those numbers exceeded Wall Street expectations and are likely to worry investors already jittery about the prospect of higher inflation amid soaring oil prices. On Thursday, such fears caused the Dow Jones Industrial Average to fall 3.6% and the Nasdaq composite index to drop 3%. Investors had expected overall producer prices to rise no more than 0.5% on Friday. Still, the numbers aren't likely to alter near-term Federal Reserve policy. Despite the price surges in September, pipeline inflationary pressures have been relatively stable over the last 12 months, the Labor Department said. In the year through September, the overall producer price index rose 3.3%, the same rate as in the year through August. The core index rose 1.2%, compared with 1.5% in the year through August. The Fed has raised its key federal funds rate six times in the last year to keep inflation in check, raising the funds rate to a nine-and-a-half-year high of 6.5%. The increases have helped slow the economy and have stalled the high-flying U.S. stock market. The Fed, however, has declined to formally call off its campaign of interest-rate increases, saying the steepest oil prices in a decade are intensifying inflation risks. "The increase in energy prices, though having limited effect on core measures of prices to date, poses a risk of raising inflation expectations," Fed policymakers said in a statement this month. They said the low U.S. unemployment rate, which dropped to 3.9% in September for only the second time in 30 years, also poses a long-term inflation risk. The Labor Department attributed most of the gain in overall producer prices in September to surging energy prices, which account for 14% of the index. Gasoline prices rose 9.3%, the biggest increase in three months. Prices of heating oil rose 13.4%. Prices of residential electricity, however, declined 0.3%. Wholesale food prices rebounded in September, rising 0.4% after a 0.7% decline in August. Computer prices, meanwhile, continued to fall in September, although the rate of decline slowed. Computer prices fell 0.3% in September after a 2.2% decline in August. Prices of prescription drugs declined 0.1% after rising 0.3% in August. Automobile prices surged, pushing up the core index in September. Prices of passenger cars rose 1.4% after a 0.3% decline in August. But analysts attributed the increase largely to statistical quirk: In September, the Bureau of Labor Statistics stops measuring the prices of 2000-model cars and begins measuring prices of 2001 models. Inflation pressures intensified further up the production pipeline. Prices of crude, or unprocessed, goods rose 5.3% after a 1.5% decline in August. Prices of intermediate, or semiprocessed, goods rose 0.7% after a 0.2% decline in August. -By Joseph Rebello and Phil McCarty; 202-862-9279 (END) DOW JONES NEWS 10-13-00