Producer prices rose 1.3 percent in September, according to the Bureau of Labor Statistics’ latest report, significantly higher than the 0.5 percent increase in August and a 0.2 percent gain in July. Prices received by domestic producers were up 6.3 percent over the year, the largest annual increase since December 2022.
Core producer prices, which exclude food, energy and trade services, rose 0.5 percent for the month and 5.0 percent over the year. The monthly increase accelerated from 0.3 percent in August.
Energy drove much of the monthly increase. Prices for final-demand goods rose 2.6 percent, the largest monthly increase since the series began in December 2009. Energy prices jumped 10.8 percent, with gasoline prices surging 20.3 percent. Prices for diesel fuel, jet fuel, residential electricity, and crude petroleum also increased.
Food prices rose 1.2 percent, while prices for goods excluding food and energy increased 0.3 percent. Chicken egg prices fell 39.7 percent.
Services prices also contributed to the increase. Prices for final-demand services rose 0.8 percent, their largest increase since April. Trade-service margins, which reflect changes in the difference between retailers’ or wholesalers’ selling prices and acquisition costs, increased 1.4 percent. Transportation and warehousing prices climbed 3.4 percent, while other services excluding trade, transportation and warehousing rose 0.3 percent.
The increase in service costs was wide-ranging. Margins for machinery and vehicle wholesaling rose 3.9 percent, while prices for truck freight transportation, food and alcohol wholesaling, traveler accommodations and airline passenger services also increased. Margins for automotive fuel and lubricant retailing fell 30.3 percent.
Prices for processed goods used by businesses also rose 2.5 percent, while unprocessed goods prices jumped 8.4 percent. Prices for intermediate-demand services increased 0.9 percent. The increases suggest that businesses faced higher costs for energy, raw materials, and other inputs in September.
For businesses, the report suggests renewed inflationary pressure, particularly from energy. And although higher producer costs do not automatically translate into higher consumer prices, businesses may pass some of those increases on to customers.
