WASHINGTON (MarketWatch) -- U.S. producer prices fell 0.4% in September -- the second consecutive month of declines -- as energy prices dropped but food prices rose, the Labor Department reported Wednesday. Excluding food and energy, core producer prices rose 0.4% last month. Analysts polled by MarketWatch were looking for a decrease of 0.6% in overall PPI, and a 0.2% increase in the core rate. Producer prices are up 8.7% over the past 12 months. In August, overall producer prices fell 0.9%, while the core gained 0.2%. The report provides some breathing room on the inflation front. Further back in the production pipeline, overall prices for intermediate goods declined 1.2%, and fell 7.9% for crude goods. Prices for raw materials don't translate directly into retail prices. Details Excluding food and energy, finished goods prices rose 4% over the past 12 months -- the largest change since 1991. Also for finished goods, residential natural gas prices fell a record 8.2% in September, compared with a prior record drop of 7.5% in October 2006. Prices for crude core goods fell a record 9.4% in September, compared with the previous record drop of 7.7% in 1974.

Source