US Producer Prices Surge 1.3%, Annual Inflation Hits 6.3%

The U.S. Labor Department reported Thursday that September PPI for final demand rose 1.3 percent, the largest monthly gain since March 2022, and climbed 6.3 percent year-over-year, the biggest annual increase since December 2022. Economists had expected a 0.5 percent monthly rise. Final-demand energy prices jumped 10.8 percent, accounting for more than 80 percent of the goods increase, with gasoline up 20.3 percent. Goods prices rose 2.6 percent, the largest since December 2009; services rose 0.8 percent. Commerce Department data the same day showed retail sales up 0.8 percent to $745.0 billion; excluding gasoline stations, sales rose 0.2 percent. Michael Pearce of Oxford Economics said the retail headline was almost entirely driven by a price-related jump in gasoline spending. Kathy Bostjancic of Nationwide said real consumer spending was likely flat in September. Chris Zaccarelli of Northlight Asset Management said a second straight day of higher-than-expected inflation numbers leaves the Fed no choice but to raise rates again this year. CPI had climbed to 3.7 percent a day earlier. The Globe and Mail reported core PPI excluding food and energy rose 0.3 percent; BigGo cited 0.7 percent and 5.0 percent year-over-year. Spot gold briefly dropped $24 after the release.