"Fed Messenger": The Fed's favorite inflation indicator may be basically flat

The report, co-authored by Nick Timiraos, a Wall Street Journal reporter known as the "Fed's mouthpiece", noted that while higher energy and food costs pushed up wholesale prices in September, some inclusion in the Fed's preferred inflation measure is likely to keep it roughly at the level of recent months, according to data released on Tuesday by the Labor Department.
The producer price index (PPI) rose 0.3% month-on-month in September, in line with economists' expectations, following a 0.1% decline in August. PPI data are usually more volatile than consumers see in stores and online.
Excluding food and energy, the core PPI rose less than expected, rising 2.6% year-on-year, the mildest increase since July 2024.
The PPI data was released more than a month later than originally planned due to delays in the release of the data due to the government shutdown. Two weeks after the standoff ended, the federal statistical agency is still working hard to replenish the data.
The PPI data will have limited impact on Fed policymakers, but some of the price data released on Tuesday will be used to calculate the personal consumption expenditure (PCE) price index - a core measure of progress towards the Fed's 2 per cent inflation target.
The PCE index is compiled by combining data from the PPI, Consumer Price Index (CPI), and import prices. As these data are released, forecasters can reliably estimate the approximate level of the PCE index.