http://www.nytimes.com/2014/09/17/business/economy/prices-remain-flat-easing-urgency-for-fed-.html 2014-09-16 22:39:14 Prices Remain Flat, Easing Urgency for Fed The Labor Department said that falling gasoline and food prices restrained inflation, creating some breathing room for economic policy makers. === WASHINGTON — Producer prices were unchanged in August, pointing to muted inflation pressures that may allow the The Labor Department said on Tuesday that falling gasoline and “The Fed has more time to allow monetary policy to work its way through the economy before feeling the need to raise rates,” said Jay Morelock, an economist at FTN Financial. Economists had expected producer prices to gain 0.1 percent last month. In the 12 months through August, they increased 1.8 percent, accelerating a bit from the 1.7 percent rise in the year through July. The report came as the Fed’s chairman, Janet L. Yellen, and other central bank policy makers gathered for a two-day meeting. They have held the Fed’s benchmark overnight rate near zero since late 2008, but are expected to inch toward an increase by the middle of next year. Data on retail sales, manufacturing, the services sector and housing have indicated the economy is on a firm growth path. Despite the mostly upbeat readings on the economy’s health, the tame reading on producer prices suggested the Fed need not rush to remove its monetary stimulus. “If Yellen is looking for evidence of slack in the economy, and thinking that inflation is too low, then P.P.I. final demand prices fill the bill,” said Chris Rupkey, chief financial economist at MUFG Union Bank. The producer price index was restrained last month by a 1.4 percent decline in gasoline prices, which followed a 2.1 percent fall in July. Food prices slipped 0.5 percent after rising 0.4 percent a month earlier. Easing wholesale food and gasoline prices could tame consumer prices over the coming months. Producer prices excluding food and energy ticked up 0.1 percent, slowing from a 0.2 percent gain in July. In the 12 months through August, the core producer price index for final demand advanced 1.8 percent. It increased 1.6 percent in July. A broader measure, which excludes food, energy and trade services, increased 0.2 percent for a third straight month. It was up 1.8 percent compared with a year earlier. The Labor Department will release August consumer price data on Wednesday, with economists expecting prices to hold steady on a month-on-month basis after nudging up 0.1 percent in July.