US wholesale prices fell 0.2 percent in October

Associated Press Modified: November 14, 2012 at 11:00 am •  Published: November 14, 2012
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WASHINGTON (AP) — Wholesale prices fell in October as a big drop in gasoline and other energy prices offset a rise in the cost of food.

Wholesale prices dipped 0.2 percent last month, the Labor Department said Wednesday. It was the first decline since May and followed big gains of 1.1 percent in September and 1.7 percent in August, increases that had been driven by spikes in energy.

Energy prices retreated a bit in October, dipping 0.5 percent but food costs were up 0.4 percent as the summer drought continued to put pressure on some food prices.

Core prices, which exclude food and energy, fell 0.2 percent in October, the biggest drop in two years. Over the past year, core prices were up a moderate 2.1 percent, evidence inflation remains under control.

In October, the fall in energy costs included a 2.2 percent drop in gasoline prices, the biggest since July, and a 3.3 percent decline in home heating oil costs.

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.

The 12-month rise in core prices of 2.1 percent reflected a moderation from the start of the year. Core wholesale prices were up 3.1 percent for the 12 months ending in January.

"Inflationary pressures at the producer level are moderate and have been slowly retreating in recent months," said Stephen Wood, chief economist at Insight Economics.

The rise in food costs was led by an 8.1 percent increase in the price of pork, the biggest spike in four years. The summer drought in the Midwest has driven up food costs include the cost of beef and pork because animal feeds made with corn have increased in price.

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