Prices fall for the first time since December

The Producer Price Index dropped 0.9% in August after many months of increased prices, according to the Department of Labor. The decrease is due largely to the 4.6% fall in energy prices, particularly natural gas and crude petroleum. Food prices, however, saw a 0.3% increase. The core index, prices excluding food and energy, rose 0.2%, a smaller increase than the 0.7% increase in July. Overall prices reflected a similar decrease of 0.8% in August of last year. This August was the first month in which the PPI fell since December of 2007. It was the greatest decline since the 1.2% drop in October of 2006. Import prices were also down 3.7%, fueled by a 12.8% decrease in petroleum imports prices. Exports fell by 1.7%. Despite price drops, the Department of Commerce reported that retail sales showed a 0.3% decrease. Not including automobiles and parts, sales were down 0.7%. Gasoline stations saw a 2.5% fall in sales, and building material dealers experienced a decline of 2.2% in sales. Electronic appliance stores, clothing and accessories stores, and non-store retailers faced a sales decline. Sales drops in these areas overshadowed gains in motor vehicle dealers, grocery stores, personal care shops and hobby, book and music stores.