U.S. producer prices surged in September at their fastest monthly pace since early 2022, with increases extending beyond energy into services, freight transportation and several wholesale trade categories.
The Producer Price Index (PPI) for final demand rose a seasonally adjusted 1.3% from August, according to data released Oct. 15 by the U.S. Bureau of Labor Statistics. That more than doubled the 0.6% consensus estimate among economists surveyed by The Wall Street Journal.
September’s increase was the largest since a 1.7% gain in March 2022. It followed upwardly revised increases of 0.5% in August and 0.2% in July. Core PPI — which excludes volatile energy and food prices — increased 0.7% month-over-month.
On an unadjusted basis, producer prices increased 6.3% over the 12 months through September — accelerating from a revised 5.6% in August and marking the largest annual increase since December 2022. Core PPI increased 5.0% year-over-year.
Other key metrics from the Bureau’s latest PPI report
- Goods prices jumped 2.6% during September, their largest increase since BLS began calculating the index in December 2009. More than 80% of that gain was attributable to a 10.8% surge in energy prices.
- Gasoline prices increased 20.3% and accounted for half of the monthly goods increase. Diesel fuel prices rose 21%, while jet fuel, residential electric power and crude petroleum also advanced. Food prices rose 1.2%, while goods prices excluding food and energy increased 0.3%.
- Prices for final demand services rose 0.8%, their largest increase since April. Trade services margins increased 1.4%, transportation and warehousing services prices climbed 3.4% and services excluding trade, transportation and warehousing rose 0.3%.
- Machinery and vehicle wholesaling margins increased 3.9%, while machinery and equipment parts and supplies wholesaling margins rose 2.4%. Paper and plastics products wholesaling margins gained 3.6%, while chemicals and allied products wholesaling margins declined 2.7%.
- Truck freight transportation prices rose 3.8% during September and 19.3% year over year.
A core PPI measure excluding food, energy and trade services increased 0.5%, above the 0.3% market forecast, and rose 5% year over year. A separate measure excluding only food and energy increased 0.7% during September, also exceeding expectations for a 0.3% gain.
Selected Distributor-Relevant PPI Categories
Monthly figures are seasonally adjusted. Annual figures are unadjusted.
| Category | September Monthly Change | 12-Month Change |
|---|---|---|
| Final demand goods | +2.6% | +9.8% |
| Final demand energy | +10.8% | +35.4% |
| Goods excluding food and energy | +0.3% | +5.1% |
| Industrial chemicals | +0.9% | +13.8% |
| Plastic packaging products | -0.5% | +5.5% |
| Softwood lumber | -1.4% | +14.2% |
| Paperboard | +1.5% | +7.0% |
| Steel mill products | +2.2% | +27.6% |
| Aluminum mill shapes | -0.1% | +25.2% |
| Copper and brass mill shapes | +1.4% | +30.0% |
| Nonferrous wire and cable | +0.3% | +23.0% |
| Hardware | 0.0% | +3.4% |
| Plumbing fixtures and brass fittings | +0.2% | +5.8% |
| Heating equipment | +0.6% | +3.2% |
| Fabricated structural metal products | +1.4% | +7.4% |
| Bolts, nuts, screws, rivets and washers | +0.6% | -3.1% |
| Fluid power equipment | 0.0% | +3.8% |
| Mechanical power transmission equipment | +1.2% | +6.0% |
| Air conditioning and refrigeration equipment | +0.4% | +5.7% |
| Switchgear, switchboards and industrial controls | +1.0% | +12.4% |
| Electronic components and accessories | -0.3% | +26.8% |
| Truck transportation of freight | +3.8% | +19.3% |
| Machinery and equipment parts and supplies wholesaling margins | +2.4% | +16.6% |
MDM Analysis
Energy drove much of September’s spike, but distributors should not dismiss the report as fuel-related volatility alone. Core prices, services, freight costs and key wholesale margins all accelerated.
Large annual increases for steel, nonferrous metals, wire and cable, electrical controls and truck freight also point to continued replenishment-cost risk. Even if some energy pressure reverses, the September report suggests pipeline inflation has broadened enough to keep margin protection and inventory discipline near the top of distributor priorities.
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