September Producer Prices Dominated by Food and Energy

On a year-over-year basis, the readings are a bit hot compared to the Federal Reserve’s 2% target, but they are down slightly from the prior month. Year-over-year, the headline PPI is up by 2.1%, but the core was up by 2.3%.

Obviously the headline data was dominated by drought prices for food and higher oil prices for much of the month. The good news is that some of this has abated (outside of California at any rate), and it generally takes several months of hot wholesale prices before Joe Public starts seeing the prices systematically passed down to the consumer price index.

JON C. OGG