Producer Prices Rise Most Since 2014 After Jump In Gasoline, Investment Advisory Costs

Tyler Durden's picture

Following the unexpectedly hot Chinese inflation data, where PPI posted its first annual increase since March 2012, moments ago the BLS reported that like in China, US wholesale prices also rose more than the 0.2% expected, up 0.3% in September, following an unchanged print the prior month. Over 75% of the jump was driven to an increase in goods prices.  On an annual basis, the final demand index increased 0.7% in September from a year ago, the largest 12-month rise since advancing 0.9% in December 2014.

The index for final demand less foods, energy, and trade services moved up 0.3% in September, the same as in August. For the 12 months ended in September, prices for final demand less foods,  energy, and trade services rose 1.5 percent, the largest increase since climbing 1.5 percent for the 12 months ended November 2014.

The breakdown was as follows:

Final demand goods: The index for final demand goods advanced 0.7 percent in September following a 0.4-percent decline in August. Over 60 percent of the broad-based rise can be attributed to a  2.5-percent increase in prices for final demand energy. The index for final demand goods less foods and energy moved up 0.3 percent, and prices for final demand foods advanced 0.5 percent.

Product detail: Thirty percent of the September rise in the index for final demand goods can be traced to a 5.3-percent increase in gasoline prices. The indexes for pharmaceutical preparations, fresh and dry vegetables, diesel fuel, jet fuel, and residential natural gas also moved higher. In contrast, prices for beef and veal fell 3.7 percent. The indexes for carbon steel scrap and asphalt also declined. (See table 4.)

Final demand services: In September, prices for final demand services inched up 0.1 percent, the same as in August. The September advance was led by the index for final demand services less trade, transportation, and warehousing, which rose 0.2 percent. Prices for final demand transportation and warehousing services increased 1.3 percent. Conversely, the final demand trade services index decreased 0.4 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.)

Product detail: A major factor in the September rise in the index for final demand services was prices for securities brokerage, dealing, investment advice, and related services, which advanced 3.9 percent. The indexes for airline passenger services, machinery and equipment wholesaling, food and alcohol retailing, and hospital inpatient care also moved higher. In contrast, margins for apparel, jewelry, footwear, and accessories retailing fell 5.2 percent. The indexes for guestroom rental, machinery and equipment parts and supplies wholesaling, and apparel wholesaling also declined.


Finally, spot where Congress began its crackdown on drug prices.

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ZH Snob's picture

inflation soon to become hyperinflation.

NoWayJose's picture

I smell a crash (of derivatives) with deflation for a couple of months - but that will be followed by 'government and central bank' actions to 'recover' - and those actions will destroy currencies and cause the hyperinflation.

LawsofPhysics's picture

Yes, "inflation/deflation" is a purely monetary thing.

eventually people who have the ability and resources to produce things of real value will in fact demand something real in return.

At that point the "flation" debate is mute.

hedge accordingly.

NoWayJose's picture

Just make sure you pay your financial advisor more so he can tell you that gas prices increased!

Arrowflinger's picture

Bond underwriting fees seem to have held up very well versus what bond holders are paid.

There are no underpaid underwriters to be found in the land of overarching fraud!

bobert727's picture

Ex. everything PPI was unchanged

LawsofPhysics's picture

More inflation, better raise those rates Janet!!!

RawPawg's picture

just a reminder

there will come a time(real soon) where we can only afford the stuff your gonna need going forward


find your priorities while you still can


Pumpkin's picture

So what exactly is making those prices rise?  Commodities?  Payroll?  Energy?  or greed.

LawsofPhysics's picture

...or scarcity.

8+ billion people, all competing for the remaining resources to support a high standard of living...


Pumpkin's picture

Could play a role, but not without being in the hands of the masses.

scubapro's picture



Yellen has specifically stated she wants inflation to run ahead of rates.   deep in their computer they figure negative real rates is the cure to a slow economy.   look at all past recessions they push rates below inflation and keep it there until recovery happens, then raise rates----but this time and last time Greenspan-B-Yellen  have left them too low for too long distorting asset prices and setting up larger % declines.   instead of counter-cyclical its become pro-cyclical southbound and northbound