Facebook Twitter

ENERGY, VEHICLE COSTS KICK PRICES UP .9 PERCENT

SHARE ENERGY, VEHICLE COSTS KICK PRICES UP .9 PERCENT

Wholesale prices shot up 0.9 percent in September, fueled by a sharp rise in energy and motor vehicle costs, the government said Friday.

The climb last month in the Labor Department's Producer Price Index wiped out consecutive price declines of 0.4 percent in August and July and 0.1 percent in June.The September reversal brought the annual wholesale inflation rate for the first nine months of the year to 5.1 percent and marked a return to the high inflation of the early part of the year.

Although wholesale inflation is not nearly as bad as feared after prices advanced at a 10.1 percent annual rate in the first quarter, it is still significantly higher than the 4 percent rate posted in all of 1988.

Contributing to the big September jump was a statistical glitch in the measurement of auto prices. Manufacturers offered their end-of-year incentives earlier than usual.

According to a Labor Department analyst, roughly 0.8 percentage points of the 0.9 percent monthly rise was attributable to motor vehicles and energy. When seasonal adjustments are factored out, auto prices actually declined 0.5 percent.

However, energy prices, which had fallen in June, July and August, shot up 6.5 percent last month. Fuel oil rose 16.3 percent; gasoline, 10.6 percent, and natural gas, 3.4 percent.

The department said food prices dropped 0.6 percent. Vegetables were down 16.1 percent; turkeys, 4.9 percent; pasta, 4.4 percent; and beef, 4 percent. Prices for pork, fish, fruit and rice also fell.

Excluding the usually volatile food and energy categories, prices rose 0.7 percent in September following a 0.5 percent increase in August. The cost of home furnishings, health products, magazines, floor coverings, tobacco and alcoholic beverages all rose.

The 0.9 percent gain in the overall index left it at 113.5, meaning that a hypothetical selection of goods costing $100 in 1982 would have cost $113.50 last month.