US producer prices post largest gain in 4-1/2 years; retail sales beat expectations
TLT•US producer prices rose 1.3% in September, the largest monthly gain since March 2022, while retail sales increased 0.8%, above expectations. Core retail sales edged up 0.1%, and weekly jobless claims remained below 200,000 for a fifth straight week.
1. Producer prices accelerate
The Producer Price Index for final demand jumped 1.3% in September after an upwardly revised 0.5% rise in August, exceeding economists’ 0.5% forecast. Prices rose 6.3% over the 12 months through September, the biggest annual increase since December 2022. Energy prices surged 10.8%, while services prices climbed 0.8%.
2. Retail sales rise
Retail sales increased 0.8% in September after an upwardly revised 1.3% jump in August, beating the 0.3% forecast. Receipts at service stations surged 6.4%. Core retail sales, which exclude automobiles, gasoline, building materials and food services, edged up 0.1%, below economists’ 0.3% estimate.
3. Fed and labor outlook
Some economists anticipated a rate increase at the Fed’s October meeting, while financial markets continued to expect the next hike in December. Initial jobless claims rose 1,000 to 199,000 in the week ended October 10, remaining below 200,000 for a fifth straight week.
