Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       

Blog Home
   Brian Wesbury
Chief Economist
X •  LinkedIn
   Bob Stein
Deputy Chief Economist
X •  LinkedIn
  The Producer Price Index (PPI) Rose 0.5% in September
Posted Under: CPI • Data Watch • Government • Inflation • Markets • PPI • Fed Reserve • Interest Rates
Supporting Image for Blog Post


Implications:   Producer prices jumped 0.5% in September following large increases in July and August, reminding the Fed that the inflation fight is still far from over.  As you can see from the nearby chart, the year-ago comparison for producer prices, now up 2.2%, has fallen considerably since the 11.7% peak in March 2022.  Keep in mind, though, that much of the moderation is due to outsized jumps in inflation immediately after the invasion of Ukraine last year, which are now rolling off year-ago calculations.  Inflation has re-accelerated of late, with producer prices up 7.7% at an annualized rate in the last three months.  Taking a look at the details of today’s report shows that “core” prices – which excludes the typically volatile food and energy components – rose 0.3% in September and are up 2.7% in the past year.  Here too, prices are accelerating, with core inflation up at a 4.5% annualized rate over the past three months.  The goods sector led prices higher in September, rising 0.9% on the back of higher energy costs.  Strip out energy, and goods prices rose a more modest 0.3%.  Services prices rose 0.3% in September as higher costs for margins received by wholesalers were tempered by a decline in prices for transportation and warehousing.  Prices further back in the pipeline have also accelerated of late.  Intermediate demand processed goods prices rose 0.5% in September following a 2.2% rise in August.  That said, these prices are down 3.7% in the past year.  Meanwhile unprocessed goods prices rose 4.0% in September following 2.0%+ increases in both July and August.  Despite the recent jumps, these prices remain down 21.0% in the past year.  While modest core inflation readings for producer prices are welcome, data from the CPI reports (September data out tomorrow morning) continue to show that the Fed hasn’t reached the finish line.

Click here for a PDF version

Posted on Wednesday, October 11, 2023 @ 10:28 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.