Inflation Continues to Ease, September Shows Improvement
A significant measure of goods and services pricing in the U.S. indicates that inflation has been decreasing as of September.
The Core Producer Price Index, which doesn’t take food and energy prices into account, saw a rise of just 0.1%, according to data released by the Labor Department on Tuesday. This report was postponed for a few weeks, primarily due to a lengthy funding dispute when Senate Democrats filibustered crucial spending bills necessary for federal government operations.
When including food and energy, the producer price index increased by three-tenths of a percent in September. Energy prices were noteworthy, rising by 3.5%—mainly due to an 11.8% hike in gasoline prices. Food costs also saw an increase of 1.1%.
Year-over-year, core prices climbed 2.6%, which is a modest decrease from August’s annual rate of 2.7%. In contrast, the overall index rose 2.7% over the same period, slightly higher than the previous month’s figure.
The Producer Price Index (PPI) evaluates the prices producers receive for goods and services in the U.S. Although referred to as a wholesale price index, it doesn’t exactly reflect wholesale prices. The main figures come from the final demand index, which is based on prices for goods sold for private consumption, foreign buyers, governments, and businesses investing in capital.
Prices for final demand goods went up by 0.9%. Notably, two-thirds of this rise can be attributed to climbing energy prices, which experienced their fastest growth since February 2024. When excluding food and energy, commodity prices increased by 0.2%, with a year-over-year rise of 3.3%.
After a drop of 0.3% in August, service prices remained unchanged for September. However, prices for transportation and warehousing services saw an uptick of 0.8%. This increase was largely due to a 4% rise in passenger transport costs, offsetting a 0.3% decrease in transport and goods warehousing prices. Trade services margins—reflecting the price changes in goods purchased by retailers and wholesalers—saw a decline of 0.2%. However, prices for services, excluding trade services, transportation, and warehousing, rose by 0.1%.
Durable consumer goods experienced a 0.2% increase, with an annual growth rate of 2.6%. Equipment costs for companies also rose by 0.2% across both manufacturing and non-manufacturing sectors. Over the past year, manufacturing capital equipment prices have surged by 4.6%, while non-manufacturing prices increased by 2.9%.
The producer price index also focuses on prices for intermediate goods and services—essentially inputs used in production or construction, excluding capital investments. In September, prices for processed goods intended for intermediate demand climbed by 0.4%, marking three consecutive months of increases. Energy prices, especially for gasoline, played a significant role in this uptick, rising by 0.9%. Additionally, intermediate food prices increased by 1.1%. Prices for intermediate goods, excluding food and energy, rose by 0.2%.
Raw material prices edged up by 0.1% after experiencing a fall of 1.8%. A significant factor in these commodity prices was an 8.2% rise in corn prices, though indices for crude oil, natural gas, raw milk, and copper saw declines.
