US producer prices were unchanged in September, pointing to a still positive inflation outlook and supporting the view that the Federal Reserve will cut interest rates again next month.
The unchanged reading in the producer price index for final demand last month followed an unrevised 0.2% increase in August, based on a statement from the Labor Department's Bureau of Labor Statistics on Friday. Economists polled by Reuters had forecast PPI rising by 0.1%.
In the 12 months to September, PPI increased by 1.8% after rising 1.9% in August. Government data on Thursday showed consumer prices rose slightly more than expected in September, driven by rising food costs.
Most economists do not see this rise in inflation as a sign that price pressures are rebuilding. Housing inflation decreased significantly in September. Economists expect a modest increase in September's measure of inflation that the US central bank is looking at to reach their 2% target.
Traders expect an interest rate cut of 25 basis points at the Federal Reserve's policy meeting on November 6-7.
They have abandoned expectations for a half-point interest rate cut following a strong September jobs report and other data that painted a more optimistic picture of the economy than previously thought.
The Federal Reserve last month cut its policy rate by 50 basis points to a range of 4.75%-5.00%. It raised rates by 525 basis points in 2022 and 2023.
