Producer prices unexpectedly fell in September south of the border, weighed down by decreases in the costs of goods and services. Experts say it could give the Federal Reserve room to cut interest rates again this month to limit the drag on the economy from trade tensions and slowing growth overseas.
The U.S. Labor Department said on Tuesday its producer price index for final demand dropped 0.3% last month, the largest decline since January, after edging up 0.1% in August.
The 12-month increase for the index was 1.4%, the smallest advance since November 2016, after rising 1.8% in August. Economists had forecast the PPI nudging up 0.1% in September and advancing 1.8% on a year-on-year basis.
Outside of food, energy and trade services, wholesale inflation unchanged last month after jumping 0.4% in August. The so-called core PPI increased 1.7% in the 12 months through September after climbing 1.9% in August.
The Fed, which has a 2% annual inflation target, tracks the core personal consumption expenditures (PCE) 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.
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