U.S. Producer Prices Hold Steady in September

US producer prices remained unchanged in September, reflecting a potential easing in inflation as the Federal Reserve prepares for upcoming interest rate decisions.

The Producer Price Index (PPI) for final demand registered no change last month compared to August, an improvement from the previous 0.2% increase and below the anticipated rise of 0.1%.

On a year-over-year basis, the index increased by 1.8%, a slower pace than the upwardly revised 1.9% in August, as reported by the Labor Department. Economists had predicted a 1.6% increase.

Costs for services rose by 0.2%, following a 0.4% growth in August, primarily due to a 3.0% surge in deposit services. In contrast, the index for final demand goods fell by 0.2%.

These figures followed separate data indicating that consumer price growth decelerated year-on-year in September, albeit at a pace greater than expectations.

Additionally, seasonally adjusted claims for first-time unemployment benefits rose to 258,000 for the week ending October 5, up from 225,000 the previous week, marking the highest initial claims level since August 2023.

Federal Reserve officials are monitoring these statistics to manage a "soft landing" for the economy, aiming to control price growth with elevated interest rates while avoiding significant job market downturns.

Last month, the Fed implemented a notable 50 basis point cut in borrowing costs, which was deemed essential to support the job market amid declining inflation. However, minutes from the meeting indicated that some policymakers preferred a smaller, quarter-point reduction, citing concerns over persistent price growth exceeding their 2% goal.