Us producer prices rose significantly more than expected in September from a year earlier, driven by fuel costs, and are likely to continue to support high inflation.
On Wednesday (October 11) before the US stock market, the data released by the US Labor Department showed that the PPI (industrial producer price index) in September rose 0.5% from the previous month, up 2.2% from the same period last year, higher than the market's previous expectations of 0.3% and 1.6%.
The 2.2 per cent year-on-year growth rate was the highest since May, rebounding for three straight months from a 0.2 per cent reading in June, and was revised up to 2 per cent from 1.6 per cent in August.
Us PPI annual breakdown data, food prices rose 0.9% month on month, energy prices rose 3.3%, of which gasoline prices rose 5.4%, is the main driving force of PPI higher, total service prices rose 0.3% month on month.
Data also showed that excluding food and energy core PPI rose 0.3% month on month, up 2.7% year on year, also beating market expectations of 0.2% and 2.3%, of which 2.3% is the highest level since May this year.
Core US PPI annual rate last month, as international oil prices continued to rebound, US gasoline prices also briefly rose to the highest level so far this year. However, at the beginning of this month, international oil prices suddenly went into "free fall" mode, and US oil prices also fell.
It would also come as a relief to officials at the White House and the Federal Reserve, who have nervously watched the recent spike in oil prices and considered the damage they could do to consumer confidence and inflation.
The US will also release the September consumer price Index (CPI) report tomorrow. Both the PPI and CPI reports have an impact on the Fed's policy decisions, with the bank's goal of getting inflation back to 2 per cent, a target it is not expected to reach until 2025.
The Fed has raised interest rates 11 times since March 2022 in an effort to rein in high inflation, taking them from near zero to their highest level in 22 years.
That has contributed to a recent surge in U.S. Treasury yields, which some central bankers see as the equivalent of a rate hike.