Rising energy costs bumped overall producer prices up 1.1% during, but consumers were happy to open their wallets.
A boost in energy costs bumped overall producer prices up 1.1% during September, according to the Bureau of Labor Statistics.
Following a 1.4% drop in August, the overall producer price index headed north last month, beating the market consensus of a 0.4% rise.
The cost of energy rose 4.1%, following a 6.6% fall in August.
Consumer prices also went up, rising 1.5% in September compared to a 0.2% dip in the previous month.
However, the core rate, which excludes volatile food and energy prices, slowed to a 0.1% gain last month, compared to a 0.2% gain in August.
Still, consumers were more than happy to open their wallets in September, disregarding the higher prices, according to the Census Bureau.
Retail sales rose 0.6% last month, following a 0.3% gain in August and beating the market forecast of 0.3%. Exclusive of motor vehicles, sales gained 0.4%.
Gasoline station sales fueled retail spending, raising sales by 2.0% in September.
Motor vehicles also had a healthy month, with a 1.2% rise in sales. Apparel sales continued to slide, losing 0.4%.
The reports seem just peachy for Kenneth Beauchemin, U.S. economist at Global Insight of Lexington, Mass. “On average, real wages have been rising faster than prices, and that helps support consumer spending,” he said.
As for inflation, the PPI isn’t the most informative measure (the consumer price index and core personal consumption expenditures are Fed favorites).
However, producer prices for intermediate goods, which are used in the production of other materials, went up 0.4%, following a 1.2% decline.
