Core wholesale prices rose less than expected in September; retail sales gain

Core wholesale prices rose less than expected in September, indicating a potential cooling in pipeline inflation pressures, the Bureau of Labor Statistics reported Tuesday.

The producer price index, a measure of what producers get for final demand goods and services, increased a seasonally adjusted 0.3% on the month, in line with the Dow Jones consensus estimate.

However, excluding food and energy, the index rose just 0.1%, below the 0.2% estimate. Both core and headline PPI had decreased 0.1% in August. Headline PPI was up 2.9% from a year ago, while core rose 2.6%.

In an era of tariff-driven cost pressures for imports, goods prices drove the PPI increase, rising 0.9% on the month, while services prices were flat. The jump in goods prices was the biggest since February 2024, according to BLS data.

Final-demand energy prices jumped 3.5% for the month, while food rose 1.1%. Of the energy increase, much of that was tied to an 11.8% surge in gasoline.

On the services side, transportation and warehousing prices rose 0.8%, while airline passenger fees surged 4%.

The September PPI release, like most other major official data points, was delayed due to the government shutdown. The BLS may not release October PPI data, as it already has canceled the October consumer price index report. November's CPI is due out Dec. 18. The PPI release is usually timed around the CPI.

In other economic news Tuesday, the Census Bureau said retail sales increased 0.2% in September, a bit softer than the 0.3% forecast. However, sales excluding autos rose 0.3%, in line with the estimate.

Miscellaneous retailers saw a 2.9% increase on the month, while gas stations, owing to the higher prices, increased 2%. Sporting goods, hobby and music stores saw a 2.5% decline while online sales were off 0.7%.

Sales at eating and drinking establishments, an indicator of discretionary spending, increased a solid 0.7% on the month and were up 6.7% from a year ago.

Retail sales, which are adjusted for seasonality but not inflation, increased 4.3% from a year ago, ahead of the 3% CPI rate for the month.