U.S. producer prices rebounded in September as the cost of energy goods surged and producers passed on some tariffs.
The Producer Price Index for final demand increased 0.3 per cent after an unrevised 0.1-per-cent drop in August, the Labor Department’s Bureau of Labor Statistics said on Tuesday. Economists polled by Reuters had forecast the PPI would rebound 0.3 per cent.
In the 12 months through September, the PPI increased 2.7 per cent after advancing by the same margin in August. The report was delayed by the 43-day shutdown of the government.
Producer goods prices jumped 0.9 per cent, the largest gain since February, 2024, after climbing 0.2 per cent in August. Energy goods, which accelerated 3.5 per cent, accounted for two-thirds of the increase in goods prices.
Wholesale services prices were unchanged after falling 0.3 per cent in August, when trade margins were compressed. The decline in trade margins had suggested that wholesalers were absorbing some of President Donald Trump’s sweeping tariffs on imported goods.
That has largely resulted in moderate consumer prices, though the cost of some goods at the supermarket, including beef, coffee and bananas, has surged.
Trump drops tariffs on beef, coffee and other foods as affordability concerns grow
Economists expect the pass-through from import duties will lift inflation in the months ahead. Several surveys, including the S&P Global PMIs, have shown U.S. businesses continued to pay higher prices for inputs as well as ask higher prices for their products in November.
The government reported in October that the consumer price index rose 0.3 per cent in September after climbing 0.4 per cent in August.
That CPI report was published despite the data blackout in order to assist the Social Security Administration with calculating its 2026 cost-of-living adjustment for millions of retirees and other benefits recipients.
The odds of another interest rate cut from the Federal Reserve in December have risen, despite concerns among some U.S. central bank officials about inflation.