U.S. Producer Prices Rise More Than Forecast on Food Costs
U.S. Producer Prices Rise More Than Forecast on Food Costs
(Bloomberg) -- Prices paid to U.S. producers rose in September by more than forecast on higher costs for food and hotel services, pointing to a continued yet moderate recovery of pricing power after pandemic-related lockdowns crushed demand.
The producer-price index increased 0.4% from a month earlier after a 0.3% gain in August, Labor Department figures showed Wednesday. The PPI climbed 0.4% year-over-year, the first positive reading since March. The median forecast called for a 0.2% increase in both the month-over-month and year-over-year figures.
Excluding volatile food and energy components, the so-called core PPI increased 0.4% for a second month and was up 1.2% from September 2019.
The figures signal that producers have been somewhat successful in raising prices as the economy recovers from the coronavirus lockdowns. At the same time, a report on Tuesday showed moderation in consumer price growth, consistent with projections that inflation will take time to reach the Federal Reserve’s 2% target.
Producer prices excluding food, energy, and trade services -- a measure preferred by economists because it strips out the most volatile components -- jumped 0.4%, the most since April 2019. Compared with a year earlier, those costs increased 0.7%, still well below the pace seen prior to the pandemic.
The cost of goods rose 0.4% from a month earlier due to gains in categories including iron and steel scrap and foods. Excluding food and fuel, goods prices also increased 0.4%.
The index for final demand services advanced 0.4%, driven by a 3.9% increase in traveler accommodation services. A measure of building materials and supply retailing also rose.
©2020 Bloomberg L.P.