US Producer Prices Jump 6.3% YoY in September, Fueling Fed Rate‑Hike Talk as CPI Hits 3.7%

SentiSense · Published Oct 14, 2026, 5:45 PM ET · Updated Oct 15, 2026, 12:01 PM ET

The Bureau of Labor Statistics reported that the September producer price index for final demand rose 1.3% on the month and 6.3% from a year earlier, the largest monthly gain since March 2022 and the largest annual gain since December 2022. Economists polled by Dow Jones had expected 0.6% and 5.5%, and energy and diesel were major drivers. Traders now price a nearly 34% chance of a Fed rate hike on Oct. 28, up from under 18% a week earlier.

The Producer Price Index for final demand rose 1.3% in September on a seasonally adjusted basis and 6.3% from a year earlier on an unadjusted basis, according to the Bureau of Labor Statistics. CNBC reported that the monthly gain was the largest since March 2022 and the annual gain the largest since December 2022, and that both topped Dow Jones consensus of 0.6% on the month and 5.5% on the year. The August monthly reading was revised up to 0.5% from 0.4%.

Energy was the main driver. BLS data show final demand energy prices jumped 10.8% on the month, final demand goods rose 2.6% and final demand services 0.8%. BLS also tied nearly half of the September rise in processed goods for intermediate demand to a 21.0% increase in diesel prices; CNBC links the energy surge to the U.S. war with Iran and curtailed Middle East oil supply. Core readings were also firm, though definitions differ: CNBC put core PPI, which excludes food and energy, at 0.7% on the month and 5% on the year, while the BLS measure that also excludes trade services rose 0.5% on the month and 5.0% on the year.

The report followed a hot consumer price index. CPI rose 0.6% on the month and 3.7% on the year, against forecasts of 0.6% and 3.6%, and core CPI rose 0.3% and 2.6% against forecasts of 0.2% and 2.5%. Retail sales rose 0.8% versus 0.4% expected, but excluding autos and gas stations they rose 0.25%, down from about 1.1% a month earlier, which CNBC read as a sign that fuel costs are making consumers cut back elsewhere.

Markets moved toward a tighter Fed. CNBC cited CME's FedWatch tool showing a nearly 34% likelihood of a rate hike on Oct. 28, up from under 18% a week earlier, with about 90% expecting at least one hike by year end. A Reuters headline on the CPI release said a Fed hike this month was back on the table. What to watch: whether energy-driven pressure keeps spreading into non-energy categories, and how the Fed reads a producer-price jump that is far larger than the 3.7% consumer reading.