PPI Climbs in September as Gasoline Costs Surge
Wholesale Goods Lead Inflation While Service Prices Hold Steady
Key Takeaways:
- U.S. wholesale inflation rose in September as the producer price index increased 0.3% after a 0.1% August decline, driven largely by higher energy and food costs.
- The index was up 2.7% from a year earlier, and BLS data showed gasoline accounted for most of the 0.9% rise in goods prices while services costs were flat.
- The report, released Nov. 25 after a shutdown delay, offers a contrast to softer consumer inflation and signals firms may be limiting price hikes despite higher import duties.
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U.S. wholesale inflation picked up in September from a month earlier, reflecting higher energy and food costs.Ìý
The producer price index rose 0.3% from a month earlier after a 0.1% decline in August, according to the Bureau of Labor Statistics. The increase matched the median projection in a Bloomberg survey of economists. Excluding food and energy, the PPI edged up 0.1%.
The PPI rose 2.7% from the same month last year, while the price gauge excluding food and energy was up 2.6%.
The report out Nov. 25, originally scheduled for Oct. 16 release, was delayed by the government shutdown. BLS did not announce a date for the October PPI in the Nov. 25 release.
Wholesale goods prices rose 0.9%, with 60% of the increase due to higher gasoline costs. Services costs were unchanged after declining a month earlier, the PPI report showed.
Within services, margins for machinery and equipment wholesaling fell, and they rose at food wholesalers. Costs for airline passenger services also rose.
The wholesale price data surface a month after the September consumer price index, which showedÌýsofter-than-expectedÌýinflation. The PPI suggests companies, worried that steeper costs risk driving customers away, were limiting the degree of price hikes to compensate for higher import duties.
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