US Producer Prices Drop In Latest Sign Of Tame Inflation

Tepid wage increases have limited retailers' ability to raise prices, keeping a lid on inflation.

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The prices charged by farmers, manufacturers and other producers fell in October for the second straight month, fresh evidence that there is little sign of inflation in the U.S. economy.

The Labor Department says the producer price index, which measures price changes before they reach the consumer, fell 0.4 percent last month. That follows a 0.5 percent drop in September. In the past year, wholesale prices have dropped 1.6 percent. That's the steepest drop since the government began tracking the data in 2010.

Tepid wage increases have limited retailers' ability to raise prices, keeping a lid on inflation. Weak price gains pose a challenge for the Federal Reserve, which targets a 2 percent inflation rate as a cushion against falling prices, or deflation.

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