US producer prices rose 0.4 percent in September

FILE - In a Tuesday, Oct. 3, 2017, file photo, Kevin Moe, a Syngenta seed representative, holds an ear of sweet corn at one of the company's test sites near Pasco, Wash. On Thursday, Oct. 12, 2017, the Labor Department reports on U.S. producer price inflation in September. (Tyler Tjomsland/The Spokesman-Review via AP, File)

WASHINGTON — Rising energy costs led prices at the wholesale level to climb 0.4 percent in September — a bout of inflation that happened in the wake of Hurricane Harvey closing a critical number of U.S. gasoline producers.

The sharp rise is expected to be temporary as the effects of the hurricane fade.

The Labor Department said Thursday that its producer price index, which measures inflation pressures before they reach the consumer, has risen 2.6 percent over the past 12 months. September's burst of inflation is likely the result of oil refineries shuttering along the Gulf of Mexico due to Hurricane Harvey toward the end of August. As a result, gasoline prices surged 10.9 percent in September.

The jump in producer prices is occurring after years of subdued inflation. The Federal Reserve targets a 2 percent yearly increase in consumer prices in order to encourage economic activity, but the U.S. central bank has persistently missed that target for the past five years. The Fed's preferred measure of inflation has increased just 1.4 percent over the 12 months ended in August.

"It will take more than one month of stronger gains in these inflation measures to convince" Fed officials that "inflation is coming back on a sustainable basis," said Scott Anderson, chief economist at Bank of the West.

For producers, food costs were unchanged last month. Motor vehicle costs rose, while computer chips fell in price.

A less volatile measure of inflation, which excludes food, energy and trade services, rose 0.2 percent last month. That measure has increased 2.1 percent over the past year.

The Fed carefully watches inflation to determine whether to raise a key short-term interest rate. That rate can influence the supply of money in the U.S. economy.

So far this year, the Fed has raised the rate in March and June from relatively low levels. Many investors and analysts expect a third rate hike this year when Fed officials meet in December, despite signs that any uptick in inflation last month are unlikely to be sustained as refineries come back on line.

Must Read

Sept. 11 memorial motorcycle ride ending on a...

Aug 10, 2016

Leaders of a massive, annual motorcycle procession to the three Sept. 11 crash sites say this...

Feds: Plastic gun from 3-D printer seized at...

Aug 10, 2016

An official says airport screening agents confiscated a plastic handgun produced with a 3-D printer...

Girardi: 'No one individual is ever bigger than...

Aug 11, 2016

Benched from the starting lineup once again as his finale approaches, Alex Rodriguez pinch hit and...

Shifting tone, Trump entertains the notion he...

Aug 12, 2016

Straying from his trademark bravado, Donald Trump is acknowledging that his presidential campaign...

Ecuador to set date for Assange to be questioned...

Aug 12, 2016

Ecuador said Thursday it's ready to set a date for Swedish prosecutors to question Julian Assange...

People also read these

Colbert to air live after Trump-Clinton...

Aug 10, 2016

Stephen Colbert, who capitalized on the political conventions with live broadcasts, will do the...

Air Force struggles with fighter pilot shortage...

Aug 10, 2016

Air Force officials say they have a shortage of 700 fighter pilots, even as the U.S. battles in...

'MacGyver' update won't be gun-free zone; more...

Aug 11, 2016

A CBS remake of the 1980s series "MacGyver" will still have the hero relying on his wit, not...

US: 45,000 Islamic State fighters taken off...

Aug 11, 2016

A top U.S. commander says that the military campaigns against the Islamic State group in Iraq and...

Shifting tone, Trump entertains the notion he...

Aug 12, 2016

Straying from his trademark bravado, Donald Trump is acknowledging that his presidential campaign...

Weather, 20 December
Houston Weather
+7

High: +11° Low: -2°

Humidity: 83%

Wind: NNE - 7 KPH

Canberra Weather
+27

High: +27° Low: +17°

Humidity: 87%

Wind: W - 20 KPH

Roissy-en-France Weather
+6

High: +6° Low: -5°

Humidity: 87%

Wind: ENE - 7 KPH

Florence Weather
+9

High: +9° Low: +6°

Humidity: 97%

Wind: ENE - 17 KPH

Parga Weather
+7

High: +16° Low: +4°

Humidity: 100%

Wind: SE - 25 KPH

About Us

In The Headline sought to bring professionalism back into journalism, bringing you only the most exclusive and the most impactive news from all over the globe.

Contact us: sales@intheheadline.com