U.S. Factory Price Index Rises as Bitcoin Tests $85,000

Bitcoin (BTC) is testing $85,000 as a U.S. factory survey shows higher raw-material costs were more widespread in September, adding an inflation concern to the rate outlook ahead of the monthly jobs report.

The Institute for Supply Management’s manufacturing Prices Index rose to 77.9 from 71.1 in August. The index tracks how widespread price increases are among manufacturers; it is not an inflation rate. The share of respondents reporting higher raw-material costs increased to 58.6% from 46.2%.

Other survey measures indicated continued manufacturing growth. The purchasing managers’ index was 54.5, new orders registered 55.3 and employment reached 52.7. Readings above 50 indicate expansion. The overall index eased from 54.6 in August, while new orders and employment increased.

The figures add an inflation concern to the rate outlook. On Sept. 16, the Federal Open Market Committee raised its target range by a quarter percentage point, to 3.75% to 4%. New York Fed President John Williams said Sept. 29 that another rate increase late this year might be appropriate if the economy broadly follows his forecast. He said that was his forecast and that the full set of incoming data would matter.

Higher borrowing costs can make leveraged positions more expensive. Higher yields on interest-bearing assets can also affect demand for assets that do not pay interest. The factory survey alone does not establish that consumer inflation will accelerate or that it caused a move in Bitcoin.

The Bureau of Labor Statistics’ September Employment Situation report is due Oct. 2 at 8:30 a.m. ET (12:30 p.m. UTC). The ISM manufacturing employment index covers manufacturers’ survey responses and is not a measure of national payroll growth.