Sunita Somvanshi
US wholesale prices jumped in September, led by energy, according to the latest Producer Price Index release from the Bureau of Labor Statistics. The final-demand PPI rose 1.3% on a seasonally adjusted basis, after gains of 0.5% in August and 0.2% in July. It was the largest monthly increase since March 2022.
Over 12 months, final-demand prices rose 6.3%, the largest annual increase since December 2022. The PPI measures price changes received by domestic producers; it is not the same as the Consumer Price Index and does not by itself show how much households will pay.
Energy drove much of the increase
Final-demand goods prices rose 2.6% in September, the largest increase in the series going back to December 2009. BLS said more than 80% of that rise came from a 10.8% jump in final-demand energy prices. Gasoline rose 20.3% and accounted for half of the increase in final-demand goods. Diesel fuel, jet fuel, residential electricity and crude petroleum also increased.
Final-demand services rose 0.8%. The measure excluding foods, energy and trade services rose 0.5% in the month and 5.0% over the year.
Does the PPI jump mean consumer inflation will rise by the same amount? No. Producer prices can feed into consumer prices, but the pass-through varies by product, contract and business margins. The September report is evidence of upstream cost pressure, especially from energy, rather than a direct forecast of any particular household bill.
The next inflation reports and the composition of future price moves will show whether September’s energy-led increase broadens or eases.
