South By North Strategies, Ltd.

The seasonally-adjusted prices received by producers of finished goods fell by 0.6 percent in September, according to data recently released by the U.S. Bureau of Labor Statistics. That same month, the prices received by sellers of intermediate goods rose slightly (+0.2 percent), and the prices received by sellers of crude goods fell by 2.1 percent.

At each stage of the production process, price changes were attributable to declines in food and energy prices. When energy and food prices are excluded, producer prices for finished goods fell by 0.1 percent in September. Absent energy and food costs, producer prices rose for both intermediate and crude goods.

Over the past year, producer prices have fallen sharply. Unadjusted prices for finished goods have declined by 4.8 percent, and producer prices for intermediate and crude goods have dropped by 11.7 percent and 31.5 percent, respectively.

The new data offer two insights into the state of the American economy. First, the findings suggest that demand for good and services remains weak. Second, the report indicates that inflation is not currently a threat to the larger economy.