- U.S. Producer Prices Jump in September
Producer prices in the U.S. rose higher in September following the biggest increase in gasoline price in more than two years.
The producer price index increased by 0.4 percent in September, up from an increase of 0.2 percent in August, the Labor Department said on Thursday.
On a yearly basis, producer prices rose 2.6 percent, the biggest since February 2012.
Gasoline prices climbed by 10.9 percent in September from an increase of 9.5 percent in August. Making it the largest increase since May 2015 and accounted for two-thirds of the 0.7 percent rise in the price of goods.
According to the Labor Department, reduction in refining capacity in the Gulf Coast area of the country due to the disruption caused by Hurricane Harvey is likely responsible for the higher energy prices.
While, the disruption is not expected to have a significant impact on subsequent data, the surge in gasoline prices is like to continue in October and November due to the Saudi Arabia’s decision to cap export at 7.15 million barrels per day in November, a production cut of 560,000 barrels a day.
The core producer prices which excludes food, energy and trade services climbed 0.2 percent last month and rose 2.1 percent on a yearly basis.
Inflation rate remained below the Federal Reserve 2 percent target even with record low unemployment rate. Price pressures remain weak amid almost stagnant wage growth.
Food prices were unchanged last month after plunging 1.3 percent in August. Another indication of weak price pressures and yet to be ascertained factor subduing prices as noted by the Federal Reserve in Wednesday minutes.
In a related report, unemployment claims fell to the lowest since late August last week. According to the Labor Department, the unemployment claims decreased by 15,000 to 243,000 last week.
Unemployment claims have now returned to levels before the storms hit Florida, Texas and Georgia in August and September that spike claims applications. The number of filings is consistent with a strong labor market.
