Producer prices surge, and consumer inflation may follow

The producer price index jumped 1.3% from August to September — the biggest monthly increase since the peak of pandemic-era inflation in 2022. On an annual basis, wholesale prices rose 6.3%. That number is "whopping, and that is not too strong a word," as host Kai Ryssdal put it. The data landed the day after the consumer price index came in hot, giving markets and policymakers a one-two punch of troubling inflation signals. And because producer prices measure what businesses pay for goods and services — the price an accounting firm charges a company, or what a farmer gets for a crop — those increases tend to flow through to consumers over time.

Why producer prices matter for what you'll pay later

The producer price index captures price changes that producers and service providers receive for their products, explained Scott Sager of the Bureau of Labor Statistics. Energy was a major driver of September's jump, but not the only one. Aditya Bhave of Bank of America Securities called it "a broad-based surprise in inflation that should be quite unpleasant from the Fed's perspective."