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Inflation next wave could be building as energy costs spread through economy

Producer prices rose 1.3% from August to September and 6.3% from a year earlier, the fastest wholesale inflation rate since 2022, driven mainly by higher fuel costs. Transportation and warehousing prices jumped 3.4% in September and are 16% higher than last year, while core consumer prices rose 2.6% year over year and 0.3% month to month, signaling that price pressures are spreading beyond energy. Diesel averaged $6.32 a gallon, compared with $3.64 a year earlier, as high energy prices linked to the war with Iran drove renewed inflation. The buildout of AI data centers is also pushing up costs for chips, computer parts and electrical components. Businesses may soon pass these costs to consumers, and markets widely expect the Federal Reserve, which has already raised rates, to hike again this year, though the timing is uncertain.

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