Wholesale inflation jumps 6.3 percent in a year, the most since 2022, while shoppers keep spending at the pump

Two inflation reports in two days have now told the same story, and the second one was worse.

The Bureau of Labor Statistics said on Thursday that the Producer Price Index, which measures what American producers receive for their goods and services, rose 1.3 percent in September and 6.3 percent over the year, as of September. That is the fastest monthly increase since March 2022 and the highest annual rate since December 2022. Economists had expected a monthly rise of about half a percent and an annual rate near 5.3 percent.

Energy did most of the damage, again. Prices for final demand energy surged 10.8 percent in the month, and wholesale gasoline prices jumped 20.3 percent, accounting for about half of the monthly increase in goods prices. Goods prices overall rose 2.6 percent, the largest monthly jump since the bureau began the series in 2009, and transport and warehousing services rose 3.4 percent as the war driven fuel shock moved through freight. The pressure was not only fuel. A measure stripping out food, energy and trade services still rose 0.5 percent in the month and 5 percent over the year, as of September.

The same morning brought the other half of the household picture. The Commerce Department said retail sales rose 0.8 percent in September to 745 billion dollars, double the forecast, after a revised 1.3 percent gain in August. But the detail under the headline was fuel. Sales at gasoline stations rose 6.4 percent, and leaving out autos and gasoline, sales rose only 0.2 percent. Restaurants rose 1.1 percent and furniture stores 1.3 percent. The figures are not adjusted for inflation, and inflation adjusted wages fell again in September.

Wall Street spent the day sorting the two reports into a rotation rather than a rout. The Dow Jones Industrial Average rose about 1.1 percent, the S and P 500 rose 0.3 percent and the Nasdaq finished up 0.1 percent after erasing steep early losses, as of the October 15 close, while traders raised the odds they assign to a Federal Reserve rate increase at the December meeting. Wholesale prices reach shop shelves with a lag, which is why economists quoted on Thursday warned that the September surge points to more consumer price increases heading into the holiday season. This report describes published figures and market moves. It is not financial advice. The picture is an illustration of a refinery and a filling station, not a photograph.