Gasoline Fuels 0.4% Wholesale Price Increase

The steepest gasoline price increases in 17 months helped push wholesale prices up a seasonally adjusted 0.4% in September, easily offsetting a dip in food prices, the government reported today.

So far this year, wholesale prices have fallen 4%. The September rise followed a 0.3% hike in August and was the largest since May’s 0.5% gain. Prices have fallen in five months this year.

Gasoline costs were up 9.2%, following two months of declining prices, a 1.5% dip in August and a 19.3% plunge in July.

As for last month, gasoline prices have not risen at such a steep clip since a 9.5% hike in April, 1985. Over the last 12 months, however, those costs have fallen 39.8%.

Economists said the price rise reflected the summer’s partial agreement by the Organization of Petroleum Exporting Countries to limit production.

Poultry Price Falls

Food prices, after rising 1.3% in August, declined 0.2% with a 12.6% drop in poultry prices and an 8.9% dip in egg prices leading the way.

The Labor Department’s producer price index, which seasonally adjusts its calculations to remove periodic, predictable influences, said new automobile prices rose 0.8% despite the end of the 1986 model year.

Without that adjustment, new car prices would have shown a 4% drop.

If September’s increase continued for the next 12 months, the yearly inflation rate at the wholesale level would be 4.7%, department analysts said. The yearly calculation is based on a more precise rendering of monthly activity than the figure made public.

Administration and private analysts expect little escalation in wholesale prices over the next year.