US producer prices edge past forecasts in September

Wholesale prices in the US slowed a tad last month even as energy and food price gains rebounded.

According to the Department of Labor, the headline rate of so-called final demand price rises increased at a month-on-month pace of 0.4% (consensus: 0.2%).

In annual terms, final demand price increases slowed from 8.7% to 8.5% (consensus: 8.4%).

Within final demand goods, food prices jumped by 1.2% over the month, after a dip of 0.1% in August, while energy prices bounced back by 0.7% after a sharp 5.6% drop in the month before.

Even so, excluding food and energy prices, final demand goods prices were unchanged in comparison to September and in the near-term at least the trend had clearly shifted down a gear.

Total final demand services meanwhile increased by 0.4% on the month as 'other' prices snapped higher by 0.6% in monthly terms.

However, trade services prices, which include retailers' margins, edged up by just 0.1% versus August.

Commenting on the latest inflation figures, Ian Shepherdson, chief economist at Pantheon Macroeconomics, pointed out how core goods price were flat on the month - the lowest reading since May 2020 - and although in annual terms inflation remained "elevated", it had come down and he expected that trend to extend in the last three months of the year.

On the services side of the equation, it was just a matter of time before gross margins at non-fuel retailers or "trade services" prices began to fall outright, he added.