WASHINGTON (AP) - Companies paid less for gas, new cars and other goods in October to drive down wholesale prices for the first time since June. Inflation pressures are easing largely because the costs of oil and other commodities have declined.
The Producer Price Index dropped 0.3 percent in October, the Labor Department said Tuesday. That follows a rise of 0.8 percent in September. Excluding volatile food and energy costs, core wholesale prices were unchanged after increasing for 10 straight months.
The index measures price changes before they reach the consumer.
"We believe that producer inflation has peaked," said Guy LeBas, chief fixed income strategist at Janney Montgomery Scott. That means manufacturers won't be under as much pressure to raise prices for consumers, he said.
Energy prices dragged down overall wholesale costs. Wholesale gas prices dropped 2.4 percent, while home heating oil fell 6 percent.
Food prices ticked up 0.1 percent, after four months of much larger increases. Food and energy prices comprise 40 percent of the index. The cost of chicken, eggs and pork jumped in October, while beef and veal prices fell.