2021.10.1413:34:00UTC+00U.S. Producer Price Growth Slows More Than Expected In September

After reporting a slightly bigger than expected increase in U.S. consumer prices on Wednesday, the Labor Department released a separate report on Thursday showing U.S. producer prices increased by slightly less than expected in the month of September.

The Labor Department said its producer price index for final demand rose by 0.5 percent in September after climbing by 0.7 percent in August. Economists had been expecting producer prices to increase by 0.6 percent.

The producer price growth was primarily due to sharp increases in prices for food and energy, which surged up by 2.0 percent and 2.8 percent, respectively.

Core producer prices, which exclude prices for food, energy and trade services, inched up by 0.1 percent in September after rising by 0.3 percent in August. Core prices were expected to climb by 0.4 percent.

The report showed prices for services edged up by 0.2 percent, with a 0.9 percent increase in prices for trade services partly offset by a 4.0 percent nosedive in prices for transportation and warehousing services.

Compared to the same month a year ago, producer prices surged by a record high 8.6 percent in September compared to an 8.3 percent spike in August.

Meanwhile, the annual rate of growth in core producer prices slowed to 5.9 percent in September from 6.3 percent in August.

"As global energy shortages increase prices heading into the northern hemisphere winter, expect supply chain issues to persist and keep producer price pressures high," said Will Compernolle, Senior Economist at FHN Financial.

He added, "Nevertheless, smaller-than-expected increases in core wholesale prices, even if they cannot be taken for granted as a harbinger of low inflation to come, are nonetheless a welcome alternative to persistent price increases."

The Labor Department released a separate report on Wednesday showing consumer prices increased by slightly more than anticipated in the month of September.

The report said consumer price index climbed by 0.4 percent in September after rising by 0.3 percent in August. Economists had been expecting another 0.3 percent increase.

Excluding higher food and energy prices, core consumer prices edged up by 0.2 percent in September after inching up by 0.1 percent in August. The uptick in core prices matched economist estimates.

The report also showed the annual rate of growth in consumer prices accelerated to 5.4 percent in September from 5.3 percent in August, while the annual rate of growth in core prices was unchanged at 4.0 percent.