November 29, 2022

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Producer Price Index for the month of September 2022:

Producer Price Index for the month of September 2022:

Wholesale prices rose more than expected in September despite the Federal Reserve’s efforts to control inflation, according to a report on Wednesday from the Bureau of Labor Statistics.

The Producer Price Index, a measure of the prices that US companies receive for the goods and services they produce, rose 0.4% for the month, compared to the Dow Jones estimate of a 0.2% gain. On a 12-month basis, the producer price index rose 8.5%, a slight slowdown from 8.7% in August.

Excluding food, energy and trade, the index rose 0.4% for the month and 5.6% from a year ago, the latter in line with August’s increase.

Inflation has been the biggest problem in the economy over the past year as the cost of living is near its highest level in more than 40 years.

The Fed has responded by raising interest rates five times this year for a total of 3 percentage points and is widely expected to implement a fourth consecutive increase of 0.75 percentage points when it meets again in three weeks.

A worker installs the kit for Ford Motor Company’s battery-powered F-150 Lightning trucks in production at the Rouge Center for Electric Vehicles in Dearborn, Michigan on September 20, 2022.

Jeff Kowalski | AFP | Getty Images

However, Wednesday’s data shows that the Fed still has work to do. In fact, Cleveland Fed President Loretta Mester said Tuesday “there has been no progress on inflation.” After the release of the Producer Price Index, traders priced an opportunity at 81.3%, up three-quarters of a point, the same as the day before.

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Stock market futures pared gains after the news, while Treasury yields changed little in the session.

The PPI release comes a day ahead of the closely watched CPI. The two scales differ in that the PPI measures prices received at the wholesale level while the CPI measures the prices paid by consumers.

About two-thirds of the increase in the producer price index was attributable to a 0.4% increase in services, the bureau said. One of the factors that contributed significantly to this increase was the 6.4% increase in the prices of passenger accommodation services.

Commodity prices at final demand also rose 0.4% during the month, driven by a 15.7% advance in the Fresh and Dry Vegetables Index.