The U.S. Producer Price Index (PPI) remained unchanged in September from the previous month, primarily due to a decline in gasoline prices, indicating further progress in managing inflation. According to data from the U.S. Bureau of Labor Statistics, the PPI for final demand showed no change in September compared to a 0.2% increase in August. Year-over-year, the PPI rose by 1.8% in September.
Excluding the volatile categories of food and energy, the core PPI increased by 0.2% month-over-month and 2.8% year-over-year. This data comes in the wake of the more closely watched Consumer Price Index (CPI), which showed slightly higher-than-expected inflation in September due to rising costs in housing, food, and apparel.
Federal Reserve officials are expected to consider these reports while planning interest rate adjustments. Economists are also paying attention to specific categories within the PPI data that align with the Fed's preferred inflation gauge, the Personal Consumption Expenditures (PCE) Price Index, which showed mixed results. The PCE price data for September is scheduled for release later this month.
The PPI report indicated that service prices increased by 0.2%, a slowdown from the 0.4% increase in the prior month. Excluding food and energy, goods prices rose by 0.2% for the third consecutive month. In September, wholesale food prices surged by 1%, marking the largest increase since February, while energy prices dropped by 2.7%.
