U.S. producer price. rose more than expected in September amid strong gains in the cost of services and goods, suggesting inflation could remain uncomfortably high for a while.
The producer price index (CPI) for final demand rebounded 0.4% last month, the Labor Department said on Wednesday. Data for August was revised lower to show the HIPR fell 0.2% instead of the 0.1% decline as previously reported. In the 12 months to September, the CPI rose 8.5% after rising 8.7% in August. Economists polled by Reuters had forecast PPI rising 0.2% and rising 8.4% year-on-year.
Modest growth in annual producer inflation was driven by an easing in supply chain bottlenecks as well as a decline in commodity prices from highs seen in the spring.
Oil and gasoline prices may decline following last week's decision by the Organization of the Petroleum Exporting Countries and its allies to cut crude oil production.
Data on Thursday may show consumer prices rose in September based on a survey of economists. This could prompt an interest rate hike of 75 basis points next month for the fourth time this year.
The Fed since March has raised its key rate from near zero to the current range of 3.00% to 3.25%. Excluding the volatile food, energy and services components of trade, producer prices also rose 0.4% in September. The so-called core PPI rose 0.2% in August.
In the 12 months to September, core PPI rose 5.6% after a similar increase in August. The US dollar index, which measures the US dollar against six major currencies, rose steadily at a trading level of 113,233.
