U.S. Annual Producer Inflation Reaches 6.3%, Beating Forecasts

U.S. producer price inflation reached 6.3% year over year in September, its highest level since May, intensifying pressure on the Federal Reserve’s inflation fight and the rate outlook watched by crypto markets.

The Producer Price Index (PPI), which tracks prices received by producers, rose 1.3% from August, well above the 0.5% forecast. The year-over-year result also exceeded the 5.3% expectation.

Core PPI, which excludes food and energy, increased 0.7% month over month and 5% from a year earlier. Retail sales grew 0.8% in September from the prior month, also above expectations.

Producer prices can signal cost pressure before it reaches consumers. Some PPI components are used in the personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation measure. Airfare prices rose 5% in September, and the next PCE reading is scheduled for Oct. 29.

Higher-than-expected inflation and retail sales put price pressures and consumer demand in focus for rate watchers. Crypto markets track that outlook because interest rates and broader financial conditions affect investor demand for riskier assets.