Wholesale inflation reaches levels last seen in 2022
[October 16, 2026] By
CHRISTOPHER RUGABER
WASHINGTON (AP) — Wholesale inflation rose more than expected last month
on a big jump in fuel costs as rising prices become a bigger economic
challenge for millions of Americans, and a growing political problem for
Republicans in the upcoming midterm elections.
The Labor Department’s producer price index — which captures inflation
before it reaches consumers — soared 6.3% in September from a year ago,
up from 5.6% in August and the biggest increase since December 2022, the
government said Thursday.
On a monthly basis, wholesale prices rose 1.3% from August to September,
marking the largest increase since March 2022, after a 0.5% gain the
previous month.
The data indicated that rising fuel prices, particularly for the diesel
fuel used by long-haul trucks and freight trains, is pushing up the cost
of shipping and warehousing goods.
That is starting to lift the cost of food, one place where prices
appeared to have cooled this year. Wholesale food prices jumped 1.2%
just from August to September, though they are still unchanged from a
year ago.
Transportation and warehousing prices climbed 3.4% last month and are
16% higher than a year ago, the report showed.
“The jolt to transportation prices affects every good in the economy,
since inputs to manufacturing move to factories and goods at all stages
of production move from producer to wholesaler to retailer by truck,
train or rail,” Carl Weinberg, chief economist at High Frequency
Economics, wrote in a client note. “This is how increases in energy
prices ‘bleed through’ to prices of core goods.”
Farmers also rely on diesel to power most of their equipment, which
could also push up food prices. Diesel prices averaged $6.32 a gallon
nationwide Thursday, according to AAA, up from just $3.66 a year ago.
Thursday’s report amplifies the consumer price index released Wednesday,
which also accelerated in September as gas prices jumped. But a broad
range of goods and services became more expensive.
Both inflation reports raise pressure on the inflation-fighters at the
Federal Reserve to hike their key interest rate. Inflation has remained
above the central bank’s 2% target for five and a half years.
Excluding the volatile food and energy categories, core prices rose 0.7%
from August to September, up sharply from 0.2% in the previous month.
Compared with a year ago, core prices rose 5%, up from 4.6% in August.
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 More expensive energy drove most of
the increase as wholesale gas prices soared more than 20% from
August to September. But the report also showed other costs rising,
including those for electricity, vegetables, shipping, and air
fares.
Ongoing inflation has eroded Americans' incomes and soured most
consumers on the economy. The Labor Department said Wednesday that
for the first time since May, average weekly paychecks when adjusted
for inflation shrank compared with the same month last year.
Higher prices have taken a toll on Trump’s standing with U.S.
voters. A new AP-NORC poll found that about 8 in 10 registered
voters disapprove of how Trump is handling the cost of living, while
about three-quarters disapprove of his handling of the economy.
The Federal Reserve, meanwhile, will hold a policy meeting in two
weeks and may keep its key short-term interest rate unchanged. After
two hot inflation reports this week, however, some economists now
expect that it could hike rates. Officials have penciled in at least
one more rate hike this year.
Fed Chairman Kevin Warsh speaks at an international economic
conference late Thursday in Bangkok and his remarks will be closely
watched for any hints of whether he supports a rate hike this month.
The Fed uses higher rates to slow borrowing and spending in a bid to
lower inflation.
That has not proved effective as hoped this year.
After a rate hike in September, the U.S reported Thursday that
retail sales rose faster than expected during the same month. A
chunk of that spending, however, was at gas stations, where
Americans are paying more to fill up their cars.
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