US producer prices rose 1.3% month-on-month in September, well above forecasts, and annual producer inflation reached 6.3%. Core readings also beat expectations, while energy drove most of the jump in goods prices.
US final demand producer prices rose 1.3% month-on-month in September, up from 0.5% in August and faster than the 0.6% economists expected. The producer price index also beat forecasts on both the annual and core measures.
Annual and core readings beat forecasts
In the twelve months to September, the index stood at 6.3%, up from 5.6%, against a forecast of 5.3%. According to the Bureau of Labor Statistics data cited by ActionForex, the monthly increase was the largest since March 2022.
Core PPI, which excludes food and energy, accelerated from 0.2% to 0.7% month-on-month, compared with an expected 0.3%. Annual core inflation rose from 4.8% to 5.0%, above the 4.4% forecast.
Energy drives the goods surge
Final demand goods prices rose 2.6% after a 1.1% gain in August. Energy prices accelerated from 4.5% to 10.8%, and gasoline alone jumped 20.3%. Goods prices excluding food and energy, however, slowed from 0.4% to 0.3%.
Services added pressure. Final demand services inflation accelerated from 0.2% to 0.8%, with trade margins rising from 0.2% to 1.4% and transportation and warehousing costs up from 2.2% to 3.4%.
Pass-through to consumers remains uncertain
Further upstream, unprocessed intermediate goods prices surged from 0.9% to 8.4%, largely driven by energy. ActionForex notes that the extent to which businesses pass these increases on to consumers remains uncertain, with profit margins and pricing decisions shaping the transmission of higher input costs.
Sources: Investing.com, ActionForex
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