CPI, Industrial Production Reports to Be Released

Rising oil prices might be reflected in two key economic reports coming this week. The consumer price index, expected Wednesday from the Commerce Department, is forecast to have risen 0.4% in September after falling 0.1% in August, analysts said. Outside of food and energy, the core rate of the CPI probably increased 0.2%, the same as the previous month. Industrial production, a measure of the output of the nation’s factories, mines and utilities compiled by the Federal Reserve in a report coming Tuesday, is expected to have stalled in September, increasing just 0.1% after rising 0.3% a month earlier, analysts said. The Fed’s report is also expected to show the plant-use rate, which tracks the amount of industrial capacity in use, probably fell to 82.1% in September from 82.3% in August. A report on manufacturing from the Federal Reserve Bank of Philadelphia, set for release Thursday, is also expected to point to a slowdown, analysts said.

It’s not just petroleum, though. Higher interest rates and weaker global demand have contributed to a slowdown in manufacturing and other segments of the economy. Fed officials, in an effort to dampen consumer demand and reduce inflationary pressures outside of energy, raised the overnight bank lending rate six times between June 1999 and May of this year. Economist Ed Hyman’s ISI Group, based in New York, now ranks the chances of a recession at 40% because of the higher interest rates, oil prices and a string of earnings warnings from major companies.