U.S. Wholesale Prices Rise on Higher Fuel Costs

Prices charged by U.S. producers accelerated in September. The producer price index was 6.3% above its level a year earlier, compared with August’s 5.6% annual increase. That was the highest reading since December 2022. From August through September, the index advanced 1.3%, its strongest monthly gain since March 2022; the prior month’s increase was 0.5%.

Energy accounted for much of the surge. Wholesale gasoline increased by more than 20% during the month, while nationwide diesel averaged $6.32 per gallon Thursday, versus $3.66 one year earlier. Diesel powers long-haul trucks, freight trains and most farm equipment, connecting fuel costs to household expenses through shipping, storage and food production. Transportation and warehousing costs gained 3.4% in September and stood 16% above their year-earlier level. Food at the wholesale level increased 1.2% for the month but remained unchanged annually.

Underlying inflation also strengthened. With food and energy removed, prices increased 0.7% for the month and 5% over the year, following August readings of 0.2% and 4.6%. The Federal Reserve meets in two weeks and may leave its short-term rate unchanged, though some economists now anticipate an increase. Officials have projected at least one additional hike this year. The continued pressure on household budgets is also weighing on Republicans before the midterm elections.