Wholesale Inflation Grew 0.4% in September, more than Expected
Wholesale inflation rose in September following two consecutive months of decline. "Two months of plunging gas prices in July and August helped turn producer price inflation negative after the steep rise in energy prices over April and May pushed it toward record levels," reports The Hill.
On Wednesday, the Labor Department announced that its producer price index (PPI) rose 0.4% in September month over month. On an annual basis, wholesale inflation rose 8.5%, compared to 8.7% in August. This is higher than what economists predicted in a survey by Refinitiv. Economists forecasted an annual gain of 8.3% and a monthly increase of 0.3%.
This is the first increase in wholesale prices in three months, a sign that inflation is still sizzling despite the Federal Reserve's continued rate hikes. Much of the price increase came from a 0.4% rise in service costs and a 6.4% rise in accommodation, according to U.S. News & World Report.
Core inflation (excluding volatile gas and food prices) remained flat at 5.6%. "The change in wholesale prices offers clues on how much inflation is increasing," per MarketWatch. "The consumer price index due on Thursday gives a better idea of how much the cost of living is going up for U.S. households."