Despite the mixed report from the Labor Department on Wednesday, inflation remains stubbornly high.
A woman shops in a supermarket as rising inflation affects consumer prices in Los Angeles, California, U.S., June 13, 2022. REUTERS/Lucy Nicholson/File PhotoPPI excluding food, energy, trade rises 0.4%WASHINGTON, Oct 12 - U.S. producer prices increased more than expected in September, but underlying goods prices posted their weakest reading in nearly 2-1/2 years as supply chains improved further, offering some hope in the battle against inflation.
The producer price index for final demand rebounded 0.4% last month. Data for August was revised lower to show the PPI falling 0.2% instead of dipping 0.1% as previously reported. Economists polled by Reuters had forecast the PPI rising 0.2%. Prices for transportation and warehousing services slipped 0.2%, falling for a third straight month and also benefiting from the loosening of bottlenecks in supply chains. Margins for final demand trade services edged up 0.1%.
"The prospect for disinflation in the goods sector in coming months remains intact," said Sarah House, a senior economist at Wells Fargo in Charlotte, North Carolina. "And further back in the pipeline, price growth for intermediate goods and services continues to trend lower and corroborate our view that the worst of inflation is likely over, even if price growth is likely to remain elevated for a while yet.
Data on Thursday is likely to show consumer prices picking up in September, according to a Reuters survey of economists, paving the way for the Federal Reserve to raise interest rates by 75 basis points next month for the fourth time this year.
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