U.S. producer prices increase; weekly jobless claims fall

U.S. producer prices rose in September as the price of gasoline recorded its biggest increase in more than two years amid hurricane-related production disruptions at oil refineries in Texas.

Other data on Thursday showed applications for unemployment benefits dropped to a more than one-month low last week as the boost to claims in Texas and Florida from Hurricanes Harvey and Irma continued to unwind. 

While the storms impacted the data, there were signs of underlying strength in both wholesale inflation and the labor market, potentially leaving the Federal Reserve on track to raise interest rates again in December. 

The Labor Department said its producer price index for final demand increased 0.4 percent last month after rising 0.2 percent in August. Wholesale prices were also lifted by an increase in the cost of services. In the 12 months through September, the PPI jumped 2.6 percent. That was the biggest gain since February 2012 and followed a 2.4 percent jump in August. 

Wholesale gasoline prices soared 10.9 percent in September after increasing 9.5 percent in August. 

The increase was the largest since May 2015 and accounted for two-thirds of the 0.7 percent rise in the price of goods. The Labor Department said higher energy prices were likely the result of “reduced refining capacity in the Gulf Coast area due to Hurricane Harvey.” 

It said Harvey and Irma, which devastated Florida, had “virtually” no impact on the collection of PPI data or survey response rates. Harvey and Irma, which struck in late August and early September, caused the economy to shed jobs last month for the first time in seven years. 

The U.S. dollar .DXY was little changed against a basket of currencies after the data. Prices of U.S. Treasuries pared gains while U.S. stock index futures were trading lower.