The long-delayed September 2025 Producer Price Index (PPI) is finally out, and it shows a slight pickup in wholesale inflation, almost entirely driven by a jump in goods prices while the services side stayed flat. Released today after the government shutdown backlog cleared, the report arrives just weeks before the Federal Reserve’s December policy decision, adding another layer to an already fragile macro picture.
Headline Inflation Tick Higher, but Core Momentum Fades
Headline PPI rose 0.3% in September, exactly matching forecasts and reversing August’s small decline. Over the last year, wholesale prices increased 2.7%, a touch higher than August’s 2.6% annual pace.
Core PPI, excluding food, energy, and trade services, barely moved, rising just 0.1%, the slowest monthly increase in three months. Still, the annual core rate edged up to 2.9%, slightly above expectations.
What Pushed Prices Up: Goods, Not Services
September’s increase came entirely from the goods side. Final demand goods prices jumped 0.9%, their strongest rise since early 2024. Gasoline was the standout driver with an 11.8% surge, while meats and corn also saw meaningful gains.
Services, on the other hand, showed no change. Stronger wholesale margins for food were offset by declines in categories like loan services, leaving the overall services index flat.
What This Means Heading Into the Fed’s December Meeting
Because the data is from September and arriving only now, its policy impact is limited, but not irrelevant. The soft core reading shows underlying producer-level inflation remains contained, even as energy costs continue to pressure headline numbers.
For a Fed still split on whether to cut or hold in December, this report offers mixed signals: no clear acceleration in core pressures, but no decisive progress either. In short, inflation at the wholesale level is cooling, just not enough to remove uncertainty from the next rate call.