A second month of sharp gains in petrol costs drove wholesale prices higher in September. But outside of the surge in energy, prices were well contained.
US wholesale prices rose 1.1% in September following a 1.7% gain in August. This had been the largest one-month gain in more than three years, the Labor Department said today.
In both months, overall prices were pushed higher by petrol, which rose 9.8% in September following an even larger 13.6% rise in August.
Core prices, which exclude food and energy, were unchanged in September, the best showing since they were also unchanged in October 2011. In August, core prices rose 0.2%.
Food prices, which had jumped 0.9% in August, showed a smaller 0.2% increase in September.
Wholesale inflation has been stable over the 12 months that ended in September. In that time, overall prices have increased just 2.1%. Core inflation is up 2.3% over the 12-month period.
Low inflation means consumers have more money to spend, which helps the economy. It also gives the Federal Reserve more room to keep interest rates low in an effort to spur economic growth. If prices were to begin rising rapidly, the central bank might be forced to raise rates in response.
Food prices have been rising since June and are expected to keep climbing, reflecting the severe drought this year in the Midwest. That has raised the price of corn, soybeans and other grains. Corn is used in animal feed and most products found in the supermarket, from cereal to cosmetics. More expensive corn prices can push up beef and pork prices.
Energy prices have eased since September but could rise further because of continued tension in the Middle East. The US government will issue its September report on consumer prices next week. In August, consumer prices rose 0.6%. The gain was also because of a big jump in petrol prices. Excluding food and energy costs, consumer prices inched up just 0.1%.