Data released by the U.S. Department of Labor on Wednesday (11th) showed that the producer price index (PPI) grew faster than expected in September, mainly due to rising energy costs. This is also a piece of the Federal Reserve’s (Fed) road to cooling inflation. The stumbling block makes the path of interest rate hike in November even more confusing.
US PPI rose 2.2% year-on-year in September, accelerating growth for three consecutive months. (Photo: ZeroHedge)
Specifically, PPI rose by 2.2% in September, higher than market expectations of 1.6% and the revised previous value of 2.0%, the largest increase since April this year and the third consecutive month of growth; excluding volatile food and energy Later, core PPI rose 2.7% year-on-year in September, higher than market expectations of 2.3% and the revised previous value of 2.5%.
On a monthly basis, the U.S. PPI increased by 0.5% in September, higher than market expectations of 0.3% and the previous value of 0.7, growing for three consecutive months; core PPI increased by 0.3% in September, higher than market expectations and the previous value of 0.2% .
It is worth noting that the PPI, which excludes food, energy and transportation prices in a narrower sense, increased by 2.8% year-on-year in September, lower than market expectations of 3.0%. The revised previous value was 2.9%; on a monthly basis, the growth was 0.2%, in line with market expectations. It was also the same as the previous value, but both data increased for two consecutive months.
The impact of the Fed’s interest rate hikes is gradually emerging. High interest rates have caused deposit service costs to soar, becoming an important driver of accelerated PPI growth in September.
Observing the details of the report, the final demand commodity index increased by 0.9% in September, the third consecutive month of growth. This time, the final demand energy price in September increased by 3.3%, which accelerated the rise of PPI, of which the gasoline index increased by 5.4%. International oil prices have increased significantly since September, continuing to drive growth in aviation fuel, liquefied natural gas, electricity and diesel prices.
9 Final demand for food increased by 0.9%, the largest increase since November 2022. (Photo: ZeroHedge)
In addition, 9 final demand for food also increased by 0.9%, the largest increase since November 2022, and the final demand commodity index excluding food and energy increased by 0.1%. The final demand services index increased by 0.3% in September, rebounding from 0.2% in August. The main reason for the index’s growth was the sharp growth of 13.9% in the deposit services (part) index.
In addition, the wholesale index of machinery, equipment, parts and materials; retail sales of health, beauty and eyewear products; tourist accommodation services; outpatient care (part); application software publishing also rose.
The Fed and Wall Street economists pay special attention to the PPI report because several categories — including those related to portfolio management and health care — are used to calculate the Fed’s preferred inflation measure, the personal consumption expenditures (PCE) index. .
Bloomberg economist Eliza Winger said that after PPI accelerated growth in September, oil price fluctuations may cause material pressure in the future. In addition, the Fed may act cautiously amid adverse supply shocks and core PPI annual growth rates well above policymakers’ 2% inflation target.
Recently, many Fed officials have believed that they may stop raising interest rates. As U.S. Treasury yields soar, financial conditions tighten, which could replace raising interest rates. There are currently more and more traders who believe that the Fed may not raise interest rates further in November, December or January next year.
2023-10-11 12:35:42
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