US wholesale prices rose last month at the fastest pace since April, suggesting that inflationary pressures remain despite a year and a half of higher interest rates, reports the AP. The Labor Department reported Wednesday that its producer price index—which measures inflation before it hits consumers by looking at the "average price changes businesses pay to suppliers," per CNN—climbed 2.2% from a year earlier. That was up from a 2% uptick in August. On a month-to-month basis, producer prices rose 0.5% from August to September. CNBC reports that's higher than economists' estimate of a 0.3% increase, but down from 0.7% from July to August. Economists had expected an annual increase of 1.6%.
Excluding volatile food and energy prices, so-called core inflation rose 2.7% in September from a year earlier and 0.3% from August. The Federal Reserve and many outside economists pay particular attention to core prices as a good signal of where inflation might be headed. Wholesale prices have been rising more slowly than consumer prices, raising hopes that inflation may continue to ease as producer costs make their way to the consumer. Wednesday's numbers show that wholesale inflation, driven by an uptick in the price of goods, came in higher last month than economists had expected.
There are growing expectations that the Fed may decide to leave interest rates alone for the rest of the year. On Monday, two Fed officials suggested that the central bank may leave its key rate unchanged at its next meeting in three weeks, helping touch off a rally in bonds and stocks. On Thursday, the Labor Department will issue its closely watched consumer price index for September. (More inflation stories.)
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