US pro­ducer prices rose 0.4 per­cent in Septem­ber

Daily Sabah (Turkey) - - Money -

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 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 sharp in­crease 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.

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.

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