US producer prices jump past forecasts in September

Factory gate inflation in the States picked up noticeably in September amid a jump in energy prices.

The US producer priced index rose by 0.3% month-on-month and 0.7% year-on-year, according to the Bureau of Labor Statistics.

Economists had expected a rise of 0.2% over the month and an annual increase of 0.6%.

At the core level, factory gate prices were up by 0.3% against August and by 1.5% on a year ago.

The consensus forecasts had called for increases of 0.1% and 1.2%, respectively.

Total final demand prices for goods increased by 0.7% over the month, led by a 2.5% rise in those for energy, while those for final demand services were up by just 0.1%.

"The yearly change in PPI has been stabisling around neutral levels since the start of 2016 following a gradual firming in domestic pipleine orice pressuers and picked up momentum further in September.

"As the drag from volatile components (such as energy and food) wanes, we expect the PPI gradually to pick up and to feed through to a firming in consumer prices. We see this report as broadly consistent with our forecast for headline (0.4% over the month) and core (0.2% over the month) CPI for September, scheduled to be released next Tuesday," Blerina Uruci at Barclays Research said in a research report sent to clients.

As of 1443 BST the yield on the benchmark 10-year note was up by three basis points to 1.77%.