Wholesale inflation accelerated in September on fuel costs
The Producer Price Index rose 6.3% in September from a year ago, a faster pace than in August and the largest annual increase since December 2022. Monthly prices increased 1.3%.
Wholesale inflation rose more than expected in September, driven by a significant jump in fuel costs, signaling persistent price pressures in the economy.
The Labor Department's Producer Price Index (PPI) increased 6.3% in September compared to a year earlier. This marks an acceleration from the 5.6% annual rise seen in August and is the highest annual rate since December 2022. On a monthly basis, wholesale prices climbed 1.3% from August to September.
The surge in transportation and warehousing costs contributed heavily to the overall increase. Prices for these services rose 3.4% in September and are up 16% from a year ago. Rising diesel prices, crucial for shipping and freight, are a primary factor.
"The jolt to transportation prices affects every good in the economy," noted Carl Weinberg, chief economist at High Frequency Economics. "This is how increases in energy prices ‘bleed through’ to prices of core goods."
While energy was the main driver, other costs also increased, including electricity, vegetables, and airfares. Core prices, excluding volatile food and energy, also rose more sharply, indicating broader inflationary trends.