US producer prices up by most since 2022 as energy pain worsens

Published Thu, Oct 15, 2026 · 10:26 PM

US PRODUCER prices rose in September at the fastest pace in more than four years as higher energy costs reverberated through the US economy.

The producer price index (PPI) advanced 1.3 per cent from a month earlier – the most since March 2022 – and 6.3 per cent from a year earlier, data from the Bureau of Labor Statistics on Thursday (Oct 15) showed.

Excluding food and energy, the gauge was up 0.7 per cent month on month, and 5 per cent from a year earlier. Both figures came in above all estimates in a Bloomberg survey.

The report suggests that underlying inflation remains firm alongside rising fuel prices, just ahead of midterm elections in November in which affordability is a central issue.

It will also likely keep US Federal Reserve officials on track for additional interest-rate increases in the months ahead, especially after a separate report on Wednesday showed a key measure of consumer prices rose faster than expected in September.

US Treasuries remained higher and stock futures remained lower after the release.

A key question for policymakers is whether the energy shock is starting to spill into the prices of other goods and services.

The PPI report showed that energy prices rose 10.8 per cent in September, while transportation and warehousing prices advanced 3.4 per cent, the most since April. Food prices rose 1.2 per cent.

“The jolt to transportation prices affects every good in the economy, since inputs to manufacturing move to factories and goods at all stages of production move from producer to wholesaler to retailer by truck, train or rail,” said Carl Weinberg, the chief economist at High Frequency Economics.

“This is how increases in energy prices ‘bleed through’ to prices of core goods.”

Other drivers

There were also other drivers of the hotter-than-expected reading. Wholesale and retail trade services margins jumped 1.4 per cent, the most since April, the figures showed.

Margins have been under scrutiny for clues on the extent to which companies are absorbing tariff-related costs or passing them on to customers.

While the Supreme Court struck down many of US President Donald Trump’s tariffs earlier this year, the administration is using other authorities to impose levies on imports. A trade war with Canada has also escalated after talks fell apart in August.

Several components of the PPI, which are of particular interest to the Fed because they feed into its preferred inflation gauge – the personal consumption expenditures (PCE) price index – were more mixed.

A gauge of airfares jumped 5 per cent month on month, but various healthcare categories were relatively soft.

Some economists nudged up their estimates for the core PCE deflator after the release, predicting it would rise either 0.3 or 0.4 per cent. The Bureau of Economic Analysis is scheduled to release September PCE price data, along with income and spending figures, on Oct 29.

“Producer-price inflation firmed in September as higher energy prices translated to higher transportation costs and wholesalers recovered margins,” said Troy Durie of Bloomberg Economics.

“More important for the Fed, PPI components that feed into PCE – namely airfares – came in above expectations, putting more pressure on PCE inflation.”

Thursday’s figures also showed a slight moderation in categories relevant to the data centre build-out.

The cost of electronic components and accessories fell 0.3 per cent in September, the price of computers and computer equipment edged up 0.1 per cent and an index of broader construction costs was little changed.

Meanwhile, separate reports out on Thursday showed that US retail sales rose in September by more than forecast as spending at petrol stations masked mixed spending at other retailers.

And the New York Fed reported the strongest growth in factory activity in that state in almost five years, with significant increases in new orders and shipments.

The bank’s October general business conditions index climbed 17.9 points to 25.5, above all estimates in a Bloomberg survey of economists.

Price pressures are expected to remain elevated in the months ahead, according to the New York Fed report. A gauge of expectations for prices paid over the next six months climbed to the highest level since 2022. BLOOMBERG