Oil Pushes PPI Inflation Rate to +4.4% YoY - Fastest Pace in Over a Year

September headline producer prices rose at twice the rate anticipated by economists, growing +1.1% MoM (consensus +.5%), and at +4.4% YoY (consensus +3.7%) versus only +2.2% YoY in August. In contrast, core producer prices, excluding food and energy, rose more slowly than expected at +.1% MoM (consensus +.2%) and +2% YoY (consensus +2.2%).

Rising oil prices were responsible for the surge higher in producer prices. Wholesale energy costs rose +4.1% MoM in September, which was the largest monthly gain in almost a year. Food prices remain in an uptrend, rising +1.5% MoM. Rising commodity prices continue to keep a floor under inflation, and many companies are passing on the rising costs rather than cut profit margins. Consumer goods also rose +1.5% MoM while capital goods prices fell -.1% MoM.

Intermediate goods costs rose +.4% MoM (+4.2% YoY), a rebound from the -1.2% MoM decline in August. Core intermediate goods rose +.1% MoM and +1.7% YoY. Core intermediate prices gains have cooled substantially versus a year ago when they were running around 8%. Raw material prices rose +.1% MoM.