WASHINGTON (dpa-AFX) - With a decrease in prices for goods offsetting an increase in prices for services, the Labor Department released a report on Friday showing producer prices in the U.S. were unexpectedly unchanged in September.
The Labor Department said its producer price index for final demand came in flat in September after rising by 0.2 percent in August. Economists had expected producer prices to inch up by 0.1 percent.
The report also said the annual rate of growth by producer prices slowed to 1.8 percent in September from an upwardly revised 1.9 percent in August.
Economists had expected the annual rate of producer price growth to dip to 1.6 percent from the 1.7 percent originally reported for the previous month.
Producer prices came in unchanged on a monthly basis as prices for goods fell by 0.2 percent, offsetting a 0.2 percent rise by prices for services.
The dip by prices for goods came as energy prices plunged by 2.7 percent, although the slump was partly offset by a 1.0 percent jump by food prices.
Meanwhile, the uptick by prices for services came as prices for transportation and warehousing services increased by 0.3 percent, prices for trade services rose by 0.2 percent and prices for other services inched up by 0.1 percent.
Excluding prices for food, energy and trade services, core producer prices crept up by 0.1 percent in September after rising by 0.2 percent in August.
The report also said the annual rate of growth by core producer prices slowed to 3.2 percent in September from 3.3 percent in August.
'After an upside surprise from the September CPI report, producer prices came in below expectations and provide support for a 25bps rate cut in November,' said Matthew Martin, Senior U.S. Economist at Oxford Economics.
On Thursday, the Labor Department released a separate report showing consumer prices in the U.S. increased by slightly more than expected in the month of September.
The Labor Department said its consumer price index rose by 0.2 percent in September, matching the increase seen in August. Economists had expected consumer prices to inch up by 0.1 percent.
The report also said core consumer prices, which exclude food and energy prices, climbed by 0.3 percent for the second consecutive month. Core prices were expected to rise by 0.2 percent.
Meanwhile, the Labor Department said the annual rate of consumer price growth slowed to 2.4 percent in September from 2.5 percent in August. Economists had expected the pace of price growth to slow to 2.3 percent.
The annual rate of core consumer price growth accelerated to 3.3 percent in September from 3.2 percent in August, while economists had expected the pace of growth to remain unchanged.
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