Food and energy prices spiked in the delayed Producer Price Index for September.

By Wolf Richter for WOLF STREET.

The Producer Price Index Final Demand bounced back in September, rising by 0.31% month-to-month (+3.8% annualized), after the drop in August (-1.6% annualized), seasonally adjusted, according to the delayed release by the BLS today (blue line in the chart).

• Food prices jumped by 1.1% (+14% annualized) month-to-month, after being essentially unchanged in the prior month.
• Energy prices exploded by 3.5% (+51% annualized), after a drop in the prior month.
• Finished core goods (without food and energy) rose by 0.17% (+2.1% annualized)
• Services prices bounced off the negative reading in August, which had followed the spike in July. The PPI for trade services dropped, while all other services combined rose, with Transportation and warehouse services spiking by 0.8% (+10% annualized).

The six-month average accelerated to +2.3% annualized in September, from +1.3% in August (red line in the chart):

Year-over-year, the PPI Final Demand rose by 2.72%, and August was revised higher to +2.70% today, from the originally reported +2.60%, and July was also revised higher today.

June 2023 had marked the low point at near 0%. Since then, the PPI has accelerated in its zigzagging manner.

“Core PPI Final Demand, which includes all goods and services except food and energy, was unchanged in September after the drop in August.

The six-month average rose by 1.5% in September from August, a deceleration from the prior month.

Year-over-year, the core PPI decelerated to +2.57%, but the prior month was revised up to +2.95% (from the originally reported +2.83%):

The PPI Final Demand Services edged up +0.04% (+0.4% annualized) in September, after the negative reading in August, which had followed the majestic spike in July.

The month-to-month change was a mix of:

• Transportation and warehousing services: +0.8%
• Final demand trade services: -0.2%.
• Other services: +0.1%

Year-over-year, the core services PPI rose by 2.53%, and August was revised up to +3.04% from the originally reported + 2.9%.

The PPI for “Finished Core Goods” rose by 0.17% (+2.1% annualized) month-to-month in September, after the jump in August that was revised up to +4.5% annualized (from the originally reported +3.8%).

The six-month average inched down to +3.46% from the upwardly revised +3.50% in August.

The tariffs paid by companies show up here indirectly. The PPI does not track import prices. It tracks prices that companies charge each other and thereby does not directly track the costs of tariffs that companies are paying on imported goods.

By tracking prices that companies charge each other, PPI indirectly tracks how companies distribute the tariffs amongst each other, as companies have had trouble passing them on to consumers, and consumer-facing companies have therefore resisted their suppliers’ efforts to pass on the tariffs to them.

Year-over-year, the PPI for finished core goods accelerated slightly to 2.85% from the upwardly revised August reading (+2.89%).

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WOLF STREET FEATURE: Daily Market Insights by Chris Vermeulen, Chief Investment Officer, TheTechnicalTraders.com.