PPI Falls 1.6% in October; Core Prices Decline by Most in 13 Years

November 14, 2006 8:30 AM, EST

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he producer price index fell 1.6% in October, matching its highest-recorded month-to-month decrease, while the "core" PPI rate excluding food and energy dropped 0.9%, its biggest decline since 1993, the Labor Department said Tuesday.

he reading of wholesale prices paid to factories, farmers and other producers follows a 1.3% drop in September.

The decrease in core prices follows a 0.6% increase in September, Bloomberg said.

Economists had forecast a 0.5% drop in the PPI and a 0.1% gain for the core rate, Bloomberg reported.

An increase in the PPI could indicate strong demand for goods, which would mean more shipments for trucking companies. However, if inflation begins to accelerate too quickly, it could also hurt the economy.

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