US producer prices jump 1.3% in September, biggest monthly rise since March 2022

The US producer price index rose 1.3% in September, more than double the 0.6% consensus and the largest monthly increase since March 2022, according to a CNBC report on Thursday, 15 October.

Headline and core

• The year-over-year PPI increase reached 6.3%, the biggest jump since December 2022.
• Gasoline prices at the producer level rose about 20% and paced the monthly gain.
• Excluding food, energy and trade services, prices still rose 0.5%, indicating broader inflation pressure beyond energy.

Implications for the Fed’s preferred gauge

• Seven Wall Street estimates gathered by CNBC put September core PCE inflation — the Federal Reserve’s preferred measure, due later this month — near 0.32%, up from 0.25% in August.
• That pace would lift the year-over-year core PCE rate to about 3.1%, from 3.01% in August. Estimates ranged from 0.29% (Oxford Economics) to 0.35% (Barclays).
• After Thursday’s reading, Fed futures showed about a 29% chance of a hike at the late-October meeting and about 91% odds of at least one hike by December, CNBC said.

Mizuho’s Alex Pelle wrote that “on the economic data alone, there is little reason for the Fed to hesitate.” Nationwide’s Kathy Bostjancic said there are “real risks” of another hike within two weeks even as recent Fed comments tempered back-to-back expectations.