Producer prices rose 1.3% in September, the biggest jump since 2022
The Federal Reserve meets Oct. 27-28, and September's personal consumption expenditures price index, the gauge it uses for its 2% inflation target, is released the morning after.
Key takeaways
U.S. producer prices rose 1.3% in September, the biggest monthly increase since a 1.7% rise in March 2022, the Bureau of Labor Statistics (BLS) said Thursday.
Producer prices were up 6.3% from a year earlier, the largest 12-month increase since a 6.4% rise in December 2022. Economists surveyed by Dow Jones had expected 0.6% for the month and 5.5% for the year.
BLS revised August's increase to 0.5%, from the 0.4% it reported on Sept. 10.
Gasoline accounted for half the rise in goods prices
Prices for goods rose 2.6%, the largest increase since BLS began that series in December 2009. More than 80% of the increase in goods prices came from energy, which jumped 10.8%. Half of the increase in goods prices came from gasoline, which rose 20.3%.
The rise was not limited to energy. Foods rose 1.2%, and goods other than food and energy rose 0.3%.
Services rose 0.8%, the largest increase since April 2026, BLS said. Nearly half of that came from a 1.4% rise in the margins wholesalers and retailers earn, the gap between what they pay for goods and what they charge.
The Federal Reserve votes before September's consumption prices
The Federal Reserve's policy committee meets Oct. 27-28. On Sept. 16 it raised the target range for the federal funds rate by 0.25 percentage point, to 3.75% to 4%, the first increase since July 2023.
Wednesday's consumer price index put inflation at 3.7% from a year earlier, up from 3.4% in August. September's personal consumption expenditures (PCE) price index, the gauge the Federal Reserve uses for its 2% inflation target, is not due until 8:30 a.m. Eastern time on Oct. 29, the morning after the decision.
The committee will vote with Wednesday's consumer prices and Thursday's producer prices, and without September's PCE reading.
Frequently asked questions
When was the last bigger monthly increase?
Producer prices rose 1.7% in March 2022, the last larger monthly increase.
Did the report beat forecasts?
Economists surveyed by Dow Jones had expected 0.6% for the month and 5.5% for the year.
What drove the rise in goods prices?
Energy jumped 10.8% and accounted for more than 80% of the increase, and gasoline, up 20.3%, accounted for half.
Will the Fed have September's consumption prices before it votes?
No, the personal consumption expenditures price index, the gauge for the 2% target, is due at 8:30 a.m. Eastern on Oct. 29, the morning after the decision.
