Wholesale prices in the U.S. rose more than forecast in September, boosted by gasoline, food and trucks, indicating inflationary pressures continue to bubble up the production line.
The producer price index climbed 0.8 percent, the most in five months, after no change in August, Labor Department figures showed today in Washington. Economists projected a 0.2% gain, according to the median of 71 estimates in a Bloomberg News survey. The so-called core measure, which excludes volatile food and energy, gained 0.2%, also more than predicted.
Slower growth from China and Europe to the U.S. means demand for raw materials will probably moderate, helping limit further gains in prices. A pickup in expenses would call into question whether inflation will cool enough to give Federal Reserve policy makers room to further spur the recovery should the world’s largest economy falter.
Projections for wholesale prices in the Bloomberg survey ranged from a 0.2% drop to an increase of 0.7%.
Compared with September 2010, companies paid 6.9 percent more for goods last month, after a 6.5% rise in August.
Wholesale prices excluding food and energy costs were projected to rise 0.1 percent for a second month, the Bloomberg survey showed.
Core wholesale prices climbed 2.5% in the 12 months ended in September, the biggest year-to-year gain since June 2009.
The gains in the PPI were led by a 4.2% increase in gasoline, a 10% surge in the cost of vegetables and a 0.6% advance for light motor trucks.
The cost of finished consumer foods climbed 0.6%.
Expenses for intermediate goods increased 0.6%, following a 0.5% drop in August that was the first decline since July 2010. Prices of crude goods climbed 2.8%.
Boise Inc., a paper and packaging maker based in Boise, Idaho, is among companies that implemented limited increases in prices and are being restrained by a slowdown in demand.
Most Fed officials at the Sept. 20-21 meeting anticipated both core and headline inflation was "likely to settle, over coming quarters, at or below the levels they see as most consistent with their dual mandate," according to minutes released on Oct. 12.
