{"id":2064927,"date":"2023-10-12T13:59:02","date_gmt":"2023-10-12T17:59:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/surge-in-producer-prices-highlights-reacceleration-in-us-inflation\/"},"modified":"2023-10-12T14:04:46","modified_gmt":"2023-10-12T18:04:46","slug":"surge-in-producer-prices-highlights-reacceleration-in-us-inflation","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/surge-in-producer-prices-highlights-reacceleration-in-us-inflation\/","title":{"rendered":"US inflation reaccelerates as producer prices surge."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">14<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fsurge-in-producer-prices-highlights-reacceleration-in-us-inflation%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2064927&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><div data-post-content=\"true\" class=\"post_content\" id=\"post_content\">\n<div class=\"my-5\">\n<blockquote>\n<p class=\"engaging-text\">U.S.\u2063 producer prices surged \u2063in September, surpassing market estimates, driven by a rise in energy and food products, according to the latest data from the \u200c <a href=\"https:\/\/www.bls.gov\/news.release\/ppi.nr0.htm\" target=\"_blank\" rel=\"noopener\">Bureau of Labor Statistics (BLS)<\/a> \u2062released \u200don Oct. 11.<\/p>\n<\/blockquote><\/div>\n<p class=\"engaging-text\">The producer price index (PPI) for final demand increased by 0.5 percent, exceeding the consensus estimate of 0.3\u200b percent. Although \u200bit eased from the\u2063 previous \u2063month&#8217;s 0.7 \u2063percent rise, \u200bit still\u200c outperformed\u200d expectations. The annual\u200b PPI climbed to 2.2 percent, the highest since April and above economists&#8217; forecast of 1.6 percent.<\/p>\n<p class=\"engaging-text\">Goods prices soared \u200dby 0.9 percent, primarily driven by a 5.4 percent\u2063 spike in gasoline costs, which accounted for over 40 percent\u200b of the increase. Prices \u2063for jet fuel, \u2062diesel fuel, and \u200belectric \u2063power \u2063also surged. Meanwhile, food\u200b costs rose by 0.9 percent, with processed young chicken and meat\u200d experiencing significant price hikes. However, prices for fresh\u200d and dry \u2064vegetables plummeted by\u200c nearly 14 percent.<\/p>\n<div class=\"shortcode\">\n    <!--$--><\/p>\n<div class=\"border-comp-divider mb-4 mr-4 w-full max-w-[500px] border px-5 py-4 text-[16px] leading-[20px] text-[#262626] md:float-left\" id=\"in_article_related_stories\">\n<h2 class=\"mb-3 font-sans text-[16px] font-semibold uppercase leading-[19px] text-[#2F2F2F]\">Related Stories<\/h2>\n<div class=\"mb-4 flex gap-2\">\n<div class=\"grow\">\n<div class=\"mb-1 line-clamp-2\">\n            <a href=\"http:\/\/www.theepochtimes.com\/article\/more-labour-disruptions-risk-leading-to-higher-wages-persistent-inflation-5508128?ea_src=author_manual&#038;ea_med=related_stories\"><\/p>\n<h3 class=\"engaging-text\">ANALYSIS:\u2062 High\u200b Inflation\u2064 Fuels \u200bTurbulent Times for Workforce<\/h3>\n<p>            <\/a>\n          <\/div>\n<div class=\"text-comp-caption text-[14px] leading-[18px]\">10\/11\/2023<\/div>\n<\/p><\/div>\n<div class=\"shrink-0 basis-[120px]\">\n          <a href=\"http:\/\/www.theepochtimes.com\/article\/more-labour-disruptions-risk-leading-to-higher-wages-persistent-inflation-5508128?ea_src=author_manual&#038;ea_med=related_stories\"><\/a>\n        <\/div>\n<\/p><\/div>\n<div class=\"mb-4 flex gap-2\">\n<div class=\"grow\">\n<div class=\"mb-1 line-clamp-2\">\n            <a href=\"http:\/\/www.theepochtimes.com\/article\/september-jobs-prints-much-higher-rattles-the-bond-market-and-risks-inflation-5505145?ea_src=author_manual&#038;ea_med=related_stories\"><\/p>\n<h3 class=\"engaging-text\">September Jobs \u200dPrints Much Higher, Rattles\u2062 the Bond Market and Risks \u2064Inflation<\/h3>\n<p>            <\/a>\n          <\/div>\n<div class=\"text-comp-caption text-[14px] leading-[18px]\">10\/6\/2023<\/div>\n<\/p><\/div>\n<div class=\"shrink-0 basis-[120px]\">\n          <a href=\"http:\/\/www.theepochtimes.com\/article\/september-jobs-prints-much-higher-rattles-the-bond-market-and-risks-inflation-5505145?ea_src=author_manual&#038;ea_med=related_stories\"><\/a>\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>    <!--\/$-->\n  <\/div>\n<p class=\"engaging-text\">Services prices edged\u200d up by\u2064 0.3 \u200bpercent, with bank deposit\u200d services experiencing a significant 13.9 percent spike. Costs also surged for various products, including machinery,\u2062 equipment, application software publishing, accommodation services, and supplies wholesaling.<\/p>\n<p class=\"engaging-text\">Excluding energy and food\u2062 components,\u2064 core producer \u2063prices \u2062jumped by 0.3 percent from\u200d August to September, reaching a year-over-year increase of 2.7 percent.\u200d Both readings\u2063 exceeded market projections of 0.2 percent and 2.3\u2063 percent, respectively.<\/p>\n<p class=\"engaging-text\">BLS statisticians revised producer prices \u200chigher, with the annual \u200cPPI adjusted \u200cto\u2064 2 percent in August\u200d from 1.6 percent, and the core PPI revised to 2.5 percent from 2.2 percent. These revisions were dated\u200d back to May.<\/p>\n<div class=\"shortcode post-related-videos\">\n    <!--$--><\/p>\n<div class=\"lazyload-wrapper\">\n<div class=\"lazyload-placeholder\"><\/div>\n<\/p><\/div>\n<p>    <!--\/$-->\n  <\/div>\n<p class=\"engaging-text\">Overall, wholesale prices have increased by \u200capproximately 18 percent since January 2021.<\/p>\n<p class=\"engaging-text\">Market analysts closely monitor\u200d the PPI as it often serves as a precursor to the \u2062consumer price \u200cindex \u2064(CPI). The PPI reflects changes \u200cin prices received by domestic producers, \u2064while the CPI measures price adjustments paid \u2063by consumers.<\/p>\n<div class=\"my-5\">\n<blockquote>\n<p class=\"engaging-text\">The annual inflation rate will be released\u200c on Oct. 12. \u200bThe Federal Reserve Bank of Cleveland&#8217;s <a href=\"https:\/\/www.clevelandfed.org\/indicators-and-data\/inflation-nowcasting\" target=\"_blank\" rel=\"noopener\">Inflation Nowcasting<\/a> \u2064 expects the CPI to remain\u2062 flat\u200b at\u200c 3.7 percent and increase by 0.4 percent month-over-month. Core CPI is anticipated\u200b to\u2064 reach \u20644.2 percent year-over-year and 0.4 percent month-over-month.<\/p>\n<\/blockquote><\/div>\n<div class=\"my-5\">\n<p class=\"engaging-text\">The latest PPI reading highlights the challenge of\u2063 taming inflation, according \u2064to Torsten Slok, chief economist at Apollo \u2064Global Management, \u200dwho stated in\u2064 an interview\u200d with Bloomberg TV.<\/p>\n<h2 class=\"engaging-text\">Stubborn Inflation and the \u200cFed<\/h2>\n<p class=\"engaging-text\">Despite increasing evidence of \u2063inflation reacceleration, global financial markets believe\u2063 that the \u2064Federal Reserve has\u2063 finished raising interest rates.<\/p>\n<\/p><\/div>\n<div class=\"my-5\">\n<p class=\"engaging-text\">According to the <a href=\"https:\/\/www.cmegroup.com\/markets\/interest-rates\/cme-fedwatch-tool.html\" target=\"_blank\" rel=\"noopener\">CME \u200dFedWatch Tool<\/a>, the futures market indicates a\u200b rate pause at the November and December Federal Open Market Committee (FOMC) policy meetings.<\/p>\n<\/p><\/div>\n<p class=\"engaging-text\">Last month, the\u2062 U.S. <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/analysis-investors-stick-to-bets-on-early-end-to-ecb-hikes-as-uncertainty-grows\/\" title=\"Analysis-Investors stick to bets on early end to ECB hikes as uncertainty grows\">central bank maintained<\/a> the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/former-fed-nominee-judy-shelton-says-fed-can-only-kill-the-economy-with-whatever-it-takes-approach\/\" title=\"Former Fed Nominee Judy Shelton Says Fed Can \u201cOnly Kill the Economy\u201d With \u201cWhatever It Takes\u201d Approach\">benchmark fed funds rate<\/a>\u200b (FFR) within a target range \u2064of 5.25 to 5.5 percent.\u2064 However, the Federal Reserve \u200bhas not ruled\u2064 out\u200c one more rate hike before the year ends to combat persistent inflation.<\/p>\n<p class=\"engaging-text\">Fed Chair Jerome Powell stated at a post-FOMC press conference,\u200b &#8220;We\u2064 have\u200b come\u200d very far, very fast\u2064 in the rate increases that we&#8217;ve made. I think it was important at the\u2062 beginning that we \u2063move quickly, \u2063and we did. As\u2062 we \u2064get closer \u200cto the rate that we think\u2014the stance \u200dof monetary policy \u200dthat we think\u2014is appropriate\u2062 to \u200cbring inflation down to 2 percent over \u200ctime, the risks\u200c become \u200dmore two-sided.&#8221;<\/p>\n<p class=\"engaging-text\">Since March 2022, the FOMC \u2063has raised rates\u200c 11 times, totaling 500 basis points.<\/p>\n<div class=\"my-5\">\n<p class=\"engaging-text\">The <a href=\"https:\/\/www.federalreserve.gov\/monetarypolicy\/files\/fomcprojtabl20230920.pdf\" target=\"_blank\" rel=\"noopener\">Summary of Economic Projections<\/a> suggests that\u2062 monetary policymakers anticipate one more rate increase this \u2064year,\u200c which\u200c would \u2064raise the \u200dmedian \u2063FFR to 5.6 percent.<\/p>\n<\/p><\/div>\n<p class=\"engaging-text\">Several central \u200bbank officials \u200dhave\u200d indicated \u200dthat interest\u2064 rates are now sufficiently high, and\u200c further \u200drate hikes may no longer be necessary. Minneapolis\u2063 Fed Bank President Neel Kashkari pointed \u2062to higher Treasury yields as a potential factor.<\/p>\n<div class=\"my-5\">\n<p class=\"engaging-text\">&#8220;It\u2019s certainly possible that higher long-term \u200cyields\u2063 may\u2063 do some of the work \u2063for us in terms\u200b of bringing \u200binflation back down,&#8221; Kashkari stated\u200b during a Minot State University\u2062 town hall \u200cevent on Oct. \u206410.\u200b &#8220;But if those higher \u200dlong-term yields are higher because their expectations about\u200d what\u2063 we\u2019re going\u2064 to do have \u200bchanged, \u2062then we \u2064might actually need to\u200c follow\u2064 through\u2062 on their expectations\u200c in order to maintain those yields.&#8221;<\/p>\n<\/p><\/div>\n<p class=\"engaging-text\">Kashkari described the recent acceleration in Treasury yields \u200bas \u2064&#8221;perplexing,&#8221; suggesting that it could be \u200bdriven by growing economic optimism or concerns about\u2064 soaring U.S. government borrowing.<\/p>\n<p class=\"engaging-text\">Despite a retreat\u200b in the U.S. bond market \u200bthis\u2064 week, Treasury yields recently \u200breached their\u200c highest\u200b levels in 16 years. The 30-year Treasury temporarily surpassed 5 percent following the hotter-than-expected September jobs report, marking \u200cthe first time since August 2007.<\/p>\n<div class=\"my-5\">\n<p class=\"engaging-text\">Fed Gov. Christopher Waller also believes that tighter financial \u200bmarkets\u2063 could help slow the economy and alleviate inflation\u200c pressures. However, \u2064the\u2063 Atlanta Fed GDPNow Model estimates a robust 5.1 percent \u2063growth rate in the third quarter.<\/p>\n<\/p><\/div>\n<\/div>\n<p> <\/p>\n<h2> What\u2063 were the primary factors driving the increase in producer prices in September?<\/h2>\n<p><span>  \u2063 By 0.2 \u2064percent in September, following a 0.3 percent rise in August. The increase was primarily driven by higher prices for hotel \u200baccommodation, which rose by 6.6 percent, the largest gain since July 2021.\u200b Prices for airline passenger services\u200b also surged by \u200c4.0 percent, reflecting the ongoing recovery in travel demand.\u2064 However, prices for physician care and outpatient hospital services declined during \u200bthe month.<\/p>\n<p>The rise in producer prices can be attributed to various factors. Firstly, energy costs continued to increase, with gasoline prices seeing a\u2063 significant spike. This can be attributed to the ongoing supply\u200d chain disruptions and rising\u2064 global energy demand. Additionally, \u200dfood \u200cprices witnessed\u200d a notable increase, driven by higher costs \u2064for processed \u200cyoung chicken and meat. However, prices for fresh\u2062 and\u200d dry vegetables experienced a significant decline.<\/p>\n<p>The increase in producer prices is a concerning indicator for inflationary pressures. Producers may attempt to pass on the\u2062 higher \u200dinput\u2062 costs to \u2063consumers, leading to an increase\u200c in consumer prices. This, in turn, may impact consumers&#8217; purchasing power and contribute to overall inflationary pressures in the economy. <\/p>\n<p>Rising producer prices also have implications for the Federal Reserve&#8217;s monetary policy. The <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/surge-in-producer-prices-highlights-reacceleration-in-us-inflation\/\" title=\"US inflation reaccelerates as producer prices surge.\">central bank closely monitors inflation indicators<\/a> \u2064to determine the appropriate course of action. If inflation continues to accelerate,\u200b the Federal Reserve may consider raising interest rates to curb inflationary pressures. \u2063However, \u200dany interest\u200c rate hikes could \u200dalso have implications for economic growth \u200cand borrowing costs.<\/p>\n<p>Economists and analysts will continue to closely monitor producer prices\u200b and\u2064 inflation \u2062in\u2063 the coming months. Any sustained increase in prices \u2064could have broader implications for the economy\u2063 and financial markets. It is crucial for policymakers\u2063 to \u2064strike a\u200d balance between \u2063supporting\u2064 economic recovery\u200c and managing inflationary pressures.<\/p>\n<p>In conclusion,\u2062 U.S. producer prices\u2063 surged in September, surpassing\u200b market estimates. The increase\u2063 was driven by higher prices for energy and food\u200b products. While this may reflect\u2064 temporary \u2064supply chain disruptions and rising global demand, it also raises concerns about\u2062 inflationary pressures. Policymakers and economists will \u200cclosely monitor these developments as they \u2064navigate the\u2062 path to economic recovery and price stability.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>U.S. producer prices rose above expectations in September, driven by a surge in energy and food products. The Bureau of Labor Statistics reported that the producer price index for final demand increased by 0.5 percent, slightly lower than the previous month&#8217;s 0.7 percent rise.<\/p>\n","protected":false},"author":278,"featured_media":2064928,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2064927","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2064927","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/278"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2064927"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2064927\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2064928"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2064927"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2064927"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2064927"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}