U.S. Producer Price Growth Slows by More Than Expected By Bloomberg

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© Reuters. U.S. Producer Price Growth Slows by More Than Expected

(Bloomberg) — Prices paid to U.S. producers rose in September at a more moderate pace, suggesting a respite from the supply chain pressures and materials shortages that have driven up the cost of production.

The producer price index for final demand increased from the prior month and from a year earlier, Labor Department data showed Thursday. Excluding volatile food and energy components, the so-called core PPI rose and was up from a year ago.

The median forecasts in a Bloomberg survey of economists called for a 0.6% month-over-month advance in the overall PPI and an 8.7% gain in the core figure.

The PPI has climbed steadily this year as interruptions in supply networks and constraints that include shortages of materials and labor, drive up production costs. Firms have passed along at least some of those costs to their customers, which explains a recent acceleration in consumer prices.

A separate report Wednesday showed prices paid by consumers rose in September by more than forecast, posting the largest annual gain since 2008.

Countries around the world are experiencing higher inflation. In China, the world’s largest exporter, a gauge prices paid to factories rose last month by the most since 1975.

Recent U.S. inflation data reinforce the Federal Reserve’s plan to soon start pulling back monetary support, especially as bottlenecks show little signs of abating. Minutes from last month’s Fed policy meeting showed that officials assessed that if the economic recovery remains on track, “a gradual tapering process that concluded around the middle of next year would likely be appropriate.”

©2021 Bloomberg L.P.

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