A -0.1% drop in wholesale goods prices took away from a +0.3% increase in wholesale service costs, limiting overall wholesale inflation to a +0.2% gain in September, recovering from August’s unexpected -0.1% drop. Costs dropped for energy (-0.8%) and food (-0.6%), and excluding food and energy goods prices rose +0.2% for the month. The increase in service prices was lead by a +1.8% increase in transportation and warehousing costs, which included a +5.4% increase in passenger transportation costs, and excluding trade, transportation and warehousing brought the wholesale service price gain down to a +0.1% increase. On a yearly basis, producer prices were up +2.6%, with goods prices up +3.2% and service prices up +2.4%.

Consumer prices edged up +0.1% in September, dropping the yearly inflation rate from +2.7% to +2.3%. Consumer food prices remained steady compared to August and were up +1.4% for the year, while energy costs declined by -0.5%, but gained +4.8% for the year. Excluding food and energy costs, inflation was up +0.1% for the month and +2.2% for the year, unchanged from August’s yearly rate. Prices dropped for both new vehicles (-0.1%), and used cars (-3.0%), but rose for apparel (+0.9%), transportation services (+0.5%), and shelter (+0.2%). On a yearly basis, prices increased the most in large cities (> 2.5 million) in the West at +3.7%, pulled up by a +3.9% increase in the Los Angeles area, and increased the most slowly in the South at +1.7%, with cities of less than 2.5 million in the South averaging a +1.6% increase in consumer prices.

U.S. export prices were unchanged in September after dropping for the two previous months, and the yearly increase in export prices fell to +2.7% after reaching a high of +5.3% in June. Agricultural export prices fell -1.4% for the month and -2.3% for the year, driven by a -18.8% drop in soybean prices over the past three months. Excluding the drop in agricultural prices, export prices rose +0.2% (+3.3% Y/Y), with price increases for fuels (+1.3%, +14.8% Y/Y) and nondurable industrial supplies (+0.6%, +10.2% Y/Y), and dropped for durable industrial supplies (-0.6%, -0.2% Y/Y), and building materials (-0.5%, +1.3% Y/Y). Import prices rose +0.5% after drops for the previous two months and were up +3.5% for the year. The increase in imports was driven by a +3.8% increase in fuel prices, with a -4.0% drop in gas prices somewhat offsetting a +4.1% increase for petroleum products. Excluding fuel, import prices were unchanged, with increases for food (+2.0%, -3.2% Y/Y) and industrial supplies (+1.5%, +14.8% Y/Y), and drops for consumer goods (-0.1%, +0.6% Y/Y).