WASHINGTON (AP) — More expensive gas likely drove overall wholesale prices higher in September. But excluding that surge, inflation likely stayed tame.
The consensus among economists was that producer price index increased 0.7 percent in September, according to a survey by FactSet. The Labor Department will release the report at 8:30 a.m. EDT Friday.
The index measures price pressures before they reach the consumer.
In August, the index rose 1.7 percent, the biggest one-month gain in more than three years. The increase was mostly because gas prices soared 13.6 percent, the biggest gain in three years. And food prices jumped 0.9 percent, driven by steep increases in the cost of eggs and dairy products.
Excluding the volatile food and gasoline categories, core wholesale prices rose only 0.2 percent. That was below July's increase.
Wholesale inflation has been stable over the 12 months that ended in August. In that time, prices increased just 2 percent. Core wholesale prices have risen 2.5 percent through August.
Low inflation means consumers have more money to spend, which helps the economy. It also gives the Federal Reserve more room to keep interest rates low in an effort to spur economic growth. If prices were to begin rising rapidly, the central bank might be forced to raise rates in response.
Food prices have been rising since June and are expected to keep climbing, reflecting the severe drought this year in the Midwest. That has raised the price of corn, soybeans and other grains.
Corn is used in animal feed and most products found in the supermarket, from cereal to cosmetics. More expensive corn prices can push up beef and pork prices.
Energy prices have eased since September but could rise further because of continued tension in the Middle East.
Gas prices averaged $3.81 a gallon nationwide on Wednesday, up three cents from a month ago, according to a survey by AAA's Fuel Gauge.
The government will issue its September report on consumer prices on Tuesday. In August, consumer prices rose 0.6 percent. The gain was also because of a big jump in gas prices. Excluding food and energy costs, consumer prices inched up just 0.1 percent.