Inflation continued cool in September while consumer spending warmed up
WASHINGTON -- Inflation remained tame last month while consumers started showing a bit more spending enthusiasm after a listless summer.</br></br>Friday's official economic reports seemed to confirm the growing consensus that price pressures remain in check despite tight labor markets, while the economy is growing at a modest pace.</br></br>"The bottom line is that this still looks like the best-of-all-worlds economy," said Edward Yardeni, economist at Deutsche Morgan Grenfell. "We're still seeing respectable spending by consumers and at the same time we have very moderate inflation."</br></br>Producer prices, which manufacturers and other producers charge distributors and retailers, rose just 0.2% in September, compared with a modest 0.3% increase in August, the Labor Department said. For the third quarter, wholesale prices for finished goods rose at a 2.2% annual rate, compared with 1.9% in the second quarter. The September consumer price index, which measures prices that retailers and distributors charge consumers, will be released on Wednesday.</br></br>"We've had capacity increases and slowing demand," said J.A. Parsons, executive vice president of Willamette Industries Inc., a Portland, Ore., maker of corrugated containers. Willamette actually cut prices about 8% in the third quarter, helping push profit down despite a 6% increase in sales.