US producer prices fall first time in a year

WASHINGTON: US producer prices fell in September for the first time since August 2013, pulled lower by falling energy and food prices, the Labor Department said Wednesday.

The producer price index dipped 0.1 percent in September, after a flat reading in August and a 0.1 percent gain in July.

Analysts had expected the PPI to rise by 0.1 percent amid tepid price changes on goods and services in the so-called "pipeline" -- before they reach consumers.

Year-over-year, producer prices were up 1.6 percent, the slowest rate since March.

In September, energy prices fell for the third month in a row, by 0.7 percent, while food prices also fell by 0.7 percent, the biggest drop in a year.

Stripping out volatile food and energy prices, core PPI was flat.

"Pipeline pressures have not intensified, and headline producer price growth is likely to remain weak as energy prices continue to soften," Briefing.com analysts said in a research note.

The data offered fresh evidence of tame inflation in the modestly growing economy, well below the Federal Reserve's longer-term 2.0 percent target.

In August, consumer prices fell for the first time in more than a year, dragged lower by declines in energy, and core prices were flat.

The Labor Department reports data on September consumer prices next Wednesday.