US wholesale prices rose twice as fast as expected — the pressure on the Fed to raise again is building.

The call

The news. US producer prices rose 1.3% in September, more than double the 0.6% expected. Rising business costs tend to reach shop prices within months, which makes another Fed rate rise more likely and leans the dollar higher into the decision on 27–28 October. Most of the jump is energy, and shoppers are weakening, so the case is moderate rather than strong.

What these numbers are

Producer prices (PPI) — what businesses charge each other for goods and services before they reach the shops. When these rise, shop prices usually follow.

Core PPI — the same, with food and energy removed, because those swing on oil and harvests. It shows whether rising costs are spreading to everything else.

Retail sales — the total Americans spent in shops, online and at petrol stations in the month. It is measured in dollars, so it rises when prices rise, even if people buy the same amount.

Core retail sales — the same, excluding cars, which swing a lot from month to month.

Why the dollar could go up from here

This was the biggest monthly rise in producer prices in over four years. Most of it was energy — over 80% of the jump in goods prices came from fuel, with petrol up 20% at wholesale. But it was not only energy. Core producer prices, excluding food and energy, rose 0.7% against 0.3% expected, and transport and warehousing costs rose 3.4%. That looks like cost pressure working its way through the supply chain.

The Fed raised rates to 3.75–4.00% in September. Inflation still building before it reaches the shops gives it more reason to raise again — and higher rates make the dollar more attractive to hold.

The weak spot

Retail sales rose 0.8% against 0.3% expected, but much of that is people paying more for petrol. Strip out petrol and spending rose only 0.2%. Adjusted for higher prices, Americans bought slightly less than in August. The part of spending that feeds directly into economic growth rose just 0.1%, below the 0.3% expected.

That is a consumer being squeezed — more going on fuel, less left for everything else. If it deepens, the Fed could decide the economy cannot take another rise.

What comes next

27–28 October — Fed decision. Wholesale prices argue for a rise. A squeezed consumer argues for waiting. This report adds more weight to the first than the second.

Sources

BLS — Producer Price Index, September 2026 · TradingKey — PPI against forecast, Fed meeting · Advisor Perspectives — retail sales excluding cars · FXStreet — sales excluding petrol, real spending, Fed rate