U.S. wholesale prices jump third month in a row as travel costs climb

ECONOMIC REPORT

Loading...

Load Error

Getty Images

The numbers: U.S. wholesale costs rose sharply in September for the third month in a row, but the recent upturn largely reflected prices returning to normal after the economy reopened and not a sustained increase in inflation.

The producer price index jumped 0.4% last month, the government said Wednesday. Economists polled by MarketWatch had predicted a 0.2% advance.

Most of the increase last month in wholesale prices was tied to a partial rebound in the cost of hotel and travel-related services after more people ventured out toward the end of the summer. Businesses were forced to slash prices last spring when lockdown orders and fear of catching the virus kept most customers away.

Inflation in the U.S. was still quite tepid. Wholesale inflation has risen just 0.4% in the past year, marking the first positive reading in six months. Typically wholesale prices start to rise before inflation filters into the broader economy.

The yearly rate had touched a seven-year high of 3.4% two summers ago.

Read: Biggest spike in used-car prices in 51 years nudges inflation higher

What happened: The cost of services rose 0.4% last month, mostly because of a nearly 4% increase in the price of hotel and related services. Prices also rose for transportation and warehousing services.

The cost of services are notoriously fickle, however, and often exaggerate the ups and downs in wholesale prices. Economists often discount big swings in service prices.

The wholesale cost of goods, however, also increased 0.4% in September. Food prices rose again, offsetting a smaller decline in the cost of energy.

What also boosted the cost of goods was a 14.7% surge in iron and scrap prices.

Another measure of wholesale costs known as core PPI also rose 0.4% last month. The 12-month rate moved up to 0.7% from 0.4%.

The big picture: Americans have witnessed large ups and downs in prices of many goods and services during the coronavirus pandemic. Most prices sank early on as households slashed spending and save more, but they rebounded during the summer as the economy began to grow again.

Yet while prices for some key staples have risen, inflation is still quite low and it’s likely to stay that way. Economists widely expect inflation to remain at 2% or less until the pandemic ends and economic growth returns close to precrisis levels.

Market reaction: The Dow Jones Industrial Average (DJIA)and S&P 500 (SPX) rose in Wednesday trades.

Continue Reading

Source Article

send message
Hello,
Iam Guest Posting Services
I Have 2000 sites
Status : Indexed All
Good DA : 20-60
Different Niche | Category
Drip Feed Allowed
I can instant publish
ASAP


My Services :

1. I will do your orders maximum of 1x24 hours, if at the time I'm online, I will do a maximum of 1 hour and the process is
completed.
2. If any of your orders are not completed a maximum of 1x24 hours, you do not have to pay me, or free.
3. For the weekend, I usually online, that weekend when I'm not online, it means I'm working Monday.
4. For the payment, maximum payed one day after published live link.
5. Payment via PayPal account.

If you interesting, please reply

Thank You

Regards,

IWAN