Producer prices accelerated 0.6 percent last month to an annual rate of 6.8 percent, with a sharp rise in new-car prices accounting for almost all of the increase, the Bureau of Labor Statistics reported yesterday.
If the price increase for the 1982-model cars is excluded from the Producer Price Index, it was a "very good release" for October, a Commerce Department economist said yesterday. There was hardly any increase in producer prices for finished goods other than motor vehicles, he said. Prices for both food and energy dropped in October, the Labor Department reported.
A slowdown in prices at the wholesale level should generate slower increases in retail prices. So far this year producer prices for finished goods have risen at a 7 1/2 percent annual rate, the BLS said. This is well below last year's annual increase of 11.8 percent.
The 0.6 percent monthly increase in October compares with a rise of only 0.2 percent in September. However, the September figures were artificially depressed by widespread discounting of automobiles for the closeout of the 1981-model year, the Commerce Department economist said.
Passenger-car prices jumped by 4.2 percent in October, putting prices last month 7.1 percent above those for October 1980, the BLS said.
The overall rise in producer prices for finished goods in October was the biggest since April, the BLS said. The July increase, initially reported as 0.4 percent, was revised down to 0.2 percent, the report said.
Food prices dropped by 0.2 percent in October after being unchanged the previous month, yesterday's release showed. The fall in energy prices was even more marked, at 0.4 percent. This followed a 0.6 percent rise in September.
Yesterday's release contained other good news on prices. Manufacturers' supplies and components--goods at the intermediate stage of processing--showed no price increase in October on a seasonally adjusted basis. Until then, the index for these goods has risen in every month since July 1975, the BLS said.
Prices for many goods in this category fell last month, and the Commerce Department economist said he was "really impressed by all the negatives." This price weakness partly reflects the present economic recession, as manufacturers cut their demand for intermediate goods.
Prices of raw materials fell again last month, for the third consecutive time. The 1.7 percent decline after seasonal adjustment reflected drops of 2 1/2 percent in prices of food and feedstuffs, and 0.8 percent in prices of other crude materials, the BLS reported.
Prices of capital equipment were up by 0.9 percent, largely because of the rise in motor vehicle prices. In a separate report, the BLS said yesterday that the value of quality improvements on the 1982-model passenger cars included in the Producer Price Index averaged $104.70 at the manufacturers level and $126.32 at the retail level.
The value of quality changes is taken out of the index showing price changes. Of the $126.32 worth of improvements, $84.68 was attributed to changes to improve fuel economy and reduce emissions.
Other details of yesterday's report showed a drop last month in beef and veal prices, which had risen in September, further declines in pork prices, and declines for fresh and dried vegetables, peanut butter and rice. Prices were up for fresh fruits, eggs, fish, coffee and sugar.
On energy prices, there was a drop of 1.4 percent in home heating oil in October, the fourth consecutive month of decline. However, gasoline prices were up by 0.4 percent following five months of decline.
The unadjusted Producer Price Index for October stood at 274, up 1.1 percent from September. This means that finished goods which cost $10 in 1967 at the wholesale level would have cost $27.40 last month.