U.S. Producer Prices Rose in September

A gauge of U.S. business prices rose in September, a sign of emerging inflation pressure in the economy.

The producer-price index for final demand, which measures changes in the prices that U.S. companies receive for their goods and services, increased a seasonally adjusted 0.4% in September from a month earlier, the Labor Department said Thursday. Economists surveyed by The Wall Street Journal had expected the index to rise 0.4% last month.

Producer prices were up 0.2% in September when excluding food, energy and an erratic measure of wholesaler and retailer margins known as trade services.

The Labor Department said Hurricanes Harvey and Irma had "virtually no impact" on survey response rates.

From a year earlier, overall ?prices advanced 2.6%, the largest rise since an advance of 2.8% for the year ended February 2012.

A plunge in energy prices caused producer prices to fall in 2015 and hold flat most of last year. But the rising oil prices and improved global demand have helped push the index higher this year.

Producer prices don't necessarily directly translate into what consumers pay, but in general, PPI readings follow the same trends as other major inflation gauges. The index has shown weakness in recent months, in line with other inflation readings.

The personal-consumption-expenditures price index, which is the Federal Reserve's preferred inflation gauge, grew a modest 1.4% in August from a year earlier, undershooting the Fed's 2% target.

The Federal Reserve is closely monitoring the path of inflation this year.?

Most Fed officials believed at their meeting last month that they likely would raise short-term interest rates again this year, though some said their decision would hinge on whether inflation picks up in the coming month?s, according to minutes of that meeting released Wednesday.?

The Labor Department releases data on the September consumer price index on Friday. Economists expect this key inflation gauge rose by 0.6% last month.

The Labor Department's producer-price index report can be accessed at: http://www.bls.gov/news.release/ppi.nr0.htm

Write to Sarah Chaney at sarah.chaney@wsj.com and Sharon Nunn at sharon.nunn@wsj.com

(END) Dow Jones Newswires

October 12, 2017 08:45 ET (12:45 GMT)