Wholesale inflation in the U.S. rose at its fastest pace in four years
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Wholesale prices in the U.S. rose at the fastest pace in more than four years in September, according to Bloomberg. The U.S. Bureau of Labor Statistics (BLS) reported that last month the Producer Price Index (PPI) jumped 1.3% from the previous month (in August, it rose 0.4%) and by 6.3% compared with the same period last year. Economists surveyed by The Wall Street Journal (WSJ) had expected a month-over-month increase of 0.6%. On a year-over-year basis, the Dow Jones consensus forecast had projected a 5.5% increase in the PPI for September. The actual figure marked the largest increase since December 2022, notes CNBC.
Excluding volatile food and energy prices, the PPI rose 0.7% month-over-month and 5% year-over-year in September.
The energy sector accounted for a significant portion of this increase, the TV channel continues, but there are signs that the sharp rise in energy prices is beginning to affect other categories as well. According to BLS data released on Thursday, nearly half of the September price increase for intermediate manufactured goods (diesel and jet fuel, chemicals, steel, plastics, and others) was due to higher diesel prices.
What does that mean?
The surge in energy prices has impacted the U.S. economy, Bloomberg reports. The PPI report only strengthens the case for the Federal Reserve (Fed) to raise interest rates as early as its next meeting in October, the WSJ writes. Nevertheless, the markets are still assessing the situation. According to data from the CME’s Fed Watch tool, traders are pricing in a 29 percent probability of such a move by the Fed at its meeting in two weeks. The day before—following the release of the September consumer price index, which came in slightly above forecasts—that probability had jumped to 50%.
Futures on major U.S. stock indices are moving in different directions following the release of a macroeconomic report: S&P 500 contracts are down 0.3%; Nasdaq 100 contracts—where the sell-off of AI-related stocks continues—are down nearly 1.3%; and Dow Jones contracts, on the other hand, are up 0.3%.
Retail Sales
In addition, on October 15, the BLS released another macroeconomic report—on retail sales. According to preliminary data, retail and restaurant sales in the U.S. rose 0.8% in September compared with August, reaching $745 billion. The figure exceeded economists’ forecasts of 0.4% growth, though the pace of growth slowed: in August, sales rose by 1.3% (after revision), according to CNBC.
On a year-over-year basis (as of September 2025), retail sales increased by 6.3%.
What People Are Saying in the Market
“Given that inflation figures have exceeded expectations for the second day in a row, it seems the Fed will have no choice but to raise interest rates again this year,” — said Chris Zaccarelli, head of the investment division at Northlight Asset Management (as quoted by CNBC).
This article was AI-translated and verified by a human editor
