US producer price inflation hits four-year high as energy costs surge

US producer price inflation accelerated sharply in September, reaching its highest annual rate in over four years and intensifying concerns that price pressures are deeply embedded across the economy. The Producer Price Index rose 1.3% month-over-month and 6.3% year-over-year, both exceeding economist forecasts. Energy costs drove the surge, with goods prices up 2.6% and energy climbing 10.8%, while gasoline jumped 20.3%. Service inflation also strengthened, rising 0.8% after August's 0.2% gain. The data followed hotter-than-expected consumer inflation, raising expectations that the Federal Reserve may maintain restrictive policy longer. Markets now price about 27% odds of an October rate hike and 89.5% for December, after the Fed's first increase since 2023 last month. Initial jobless claims rose slightly to 199,000, keeping the labor market stable.