KEY POINTS:
WASHINGTON - US producer prices tumbled in October at their sharpest rate since a matching record drop five years ago, influenced by cheaper energy costs that also sapped retail sales and showed a softening pace of economic activity.
A Labor Department report today said its Producer Price Index (PPI) that measures prices at the factory and farm level dropped 1.6 per cent. This matched a record fall in October 2001 and was three times the decline Wall Street analysts had predicted.
Core producer prices that exclude food and energy fell 0.9 per cent, the biggest decline since a 1.2 per cent fall in August 1993.
"These numbers are the latest indication that the US economy is slowing and that inflation is in fact decelerating," said Mark Meadows, a currency strategist with Tempus Consulting in Washington.
- REUTERS
