With energy prices continuing to surge, a report released by the Labor Department on Wednesday showed U.S. producer prices increased by slightly more than expected in the month of September.
The Labor Department said its producer price index for final demand climbed by 0.5 percent in September after advancing by 0.7 percent in August. Economists had expected prices to rise by 0.4 percent.
The report also said the annual rate of producer price growth accelerated to 2.2 percent in September from a revised 2.0 percent in August.
Economists had expected the pace of price growth to come in unchanged compared to the 1.6 percent originally reported for the previous month.
The slightly bigger than expected monthly increase in producer prices came as prices for final demand goods jumped by 0.9 percent in September after surging by 2.0 percent in August.
Energy prices led the way higher, spiking by 3.3 percent in September after skyrocketing by 10.3 percent in August. Prices for gasoline soared by 5.4 percent.
Prices for jet fuel, processed young chickens, meats, electric power, and diesel fuel also advanced, while prices for fresh and dry vegetables plunged by 13.9 percent. Prices for wood pulp and utility natural gas also fell.
Meanwhile, the Labor Department said prices for final demand services rose by 0.3 percent in September after inching up by 0.2 percent in August.
While prices for transportation and warehousing services fell by 0.4 percent, prices for trade services climbed by 0.5 percent and prices for other services increased by 0.3 percent.
Excluding prices for food, energy, and trade services, core producer prices edged up by 0.2 percent in September, matching the uptick seen in August.
The annual rate of growth by core producer prices slowed to 2.8 percent in September from 2.9 percent in the previous month.
“Officials are committed to reigning in inflation, but we expect prices to slow enough over the coming quarters to keep additional rate hikes off the table,” said Matthew Martin, U.S. Economist at Oxford Economics.
On Thursday, the Labor Department is scheduled to release its more closely watched report on consumer price inflation in the month of September.
Consumer prices are expected to rise by 0.3 percent in September after climbing by 0.6 percent in August, while the annual rate of consumer price growth is expected to slow to 3.6 percent from 3.7 percent.
Excluding food and energy prices, core consumer prices are expected to increase by 0.3 percent. The annual rate of core price growth is expected to slow to 4.1 percent in September from 4.3 percent in August.
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