U.S. producer prices unexpectedly fell in September, leading to the smallest ann...
WASHINGTON - U.S. producer prices unexpectedly fell in September, leading to the smallest annual increase in nearly three years, likely giving the Federal Reserve further room to cut interest rates for the third time this year in October.
The producer price index for final demand dropped 0.3% last month, weighed down by decreases in the costs of goods and services, the government said. That was the largest decline since January and followed a 0.1% gain in August. The Fed, which has a 2% annual inflation target, tracks the core personal consumption expenditures price index for monetary policy. The core PCE price index rose 1.8% on a year-on-year basis in August and has undershot its target this year.
U.S. financial markets were little moved by the inflation data as investors digested news that the White House was moving ahead with discussions around possible restrictions on capital flows into China, with a focus on investments made by U.S. government pension funds. Wholesale food prices rebounded 0.3% in September, lifted by a 26.8% surge in the cost of chicken eggs. Food prices dropped 0.6% in August. Core goods prices fell 0.1% last month. They were unchanged in August.
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