Just how much the US economy has slowed can be shown by today’s release of the Producer Price Index from the
Bureau Of Labor Statistics
. PPI numbers reached a peak growth rate of .9%(adjusted) back in April and those strong numbers were one of the factors that prompted the
Federal Reserve
to maintain its policy of interest rate rises.
So from the April peak of .9%, the PPI index increased at a lower rate of .6% in June followed by an even lower rate of .1% for the month of August. The growth rate in September came in sharply lower at -1.3%, which gave a clear indication that inflationary pressure on the economy was easing.
Today we get the October PPI rate and it come in at a surprisingly larger negative growth rate of –1.6%. That decline points very strongly to the Federal Reserve starting a campaign of interest rate cuts.
Copper prices on
NYMEX
halted their slide on the news and US markets rallied with the Dow gaining 86.13 points to close at 12,218, and the S&P 500 gained 8.8 points to close at 1,393.22.