in the accelerated in September, recording its biggest annual increase in nearly four years as soaring fuel costs added to the economic pressures facing American consumers and businesses.
The Labor Department’s producer price index (PPI), which measures price changes before goods and services reach consumers, rose 6.3% in September from a year earlier, compared with 5.6% in August. The increase was the largest since December 2022, the government said on Thursday.
On a month-on-month basis, wholesale prices climbed 1.3% between August and September, marking their biggest increase since March 2022. Prices had risen 0.5% in the previous month.
The latest figures follow the release of the US consumer price index () on Wednesday, which also showed inflation accelerating in September as petrol prices increased. Prices across a broad range of goods and services also rose.
Together, the two inflation reports could intensify pressure on the Federal Reserve as it weighs its next interest-rate decisions. Inflation has remained above the central bank’s 2% target for five and a half years.
US energy costs drive wholesale inflation higher
Excluding the volatile food and energy categories, core producer prices rose 0.7% between August and September, up sharply from a 0.2% increase in the previous month.
On an annual basis, core prices increased 5% in September, compared with 4.6% in August.
Higher energy costs accounted for much of the increase, with wholesale gas prices surging more than 20% from August to September. The report also recorded increases in the costs of electricity, vegetables, shipping and air fares.
The broad-based rise in producer prices indicates that inflationary pressures extended beyond energy, affecting several other categories of goods and services.
Rising prices weigh on US consumers and Trump
Persistent inflation has eroded Americans’ purchasing power and weakened consumer sentiment about the economy.
The Labor Department said on Wednesday that inflation-adjusted average weekly paychecks fell in September compared with a year earlier, marking the first annual decline since May.
Higher living costs have also weighed on US President Donald Trump’s standing among voters. A poll released this month by The Associated Press-NORC Center for Public Affairs Research found that only 17% of US adults approved of Trump’s handling of the cost of living.
Just 26% approved of his overall handling of the economy, the lowest level recorded in the poll.
What does US inflation mean for the Federal Reserve?
The Federal Reserve is scheduled to hold its next policy meeting in two weeks and is expected to leave its key short-term interest rate unchanged.
However, policymakers had already indicated the possibility of another rate increase later this year, with economists largely expecting it to take place in December.
The central bank raises interest rates to increase borrowing costs, moderate borrowing and spending, and bring inflation down.
The latest producer-price data, alongside the increase in consumer prices, could complicate the Fed’s efforts to bring inflation back towards its 2% target.
(With inputs by AP)