Wholesale-level inflation rose 8.5 percent in September from a year earlier, the third straight drop, though costs remain painfully high.
Wednesday’s report from the Labor Department also showed the producer price index, which measures price changes before they reach consumers, rose 0.4 percent in September from August after two months of decline.
September’s monthly increase was larger than expected and was driven by a large rise in hotel room costs. Food costs also increased in September from August, after falling slightly the previous month.
Stubbornly high inflation is draining Americans’ bank accounts, frustrating small businesses and sounding alarm bells at the Federal Reserve.
It is also causing political headaches for President Joe Biden and congressional Democrats, most of whom will face voters in the midterm elections in less than a month.
The Fed has raised its benchmark short-term interest rate by three percentage points since March to combat rising prices. It is the fastest pace of rate hikes since the early 1980s.
The higher rates are intended to cool consumer and business lending and spending, and to slow the economy.
Wednesday’s producer price data captures inflation at an earlier stage of production and can often indicate where consumer prices are headed. It also feeds into the Federal Reserve’s preferred measure of inflation, which is called the personal consumption expenditures price index.