Inflation for US producers continued to ease in September and this has also optimism that prices are not rising sharply before they reach the consumer.

PPI measures the average price change faced by producers and manufacturers; it recorded an inflation rate of 1.8% for the year up to September, 2013. This is slightly lower than the 1.9% increase recorded in August as highlighted by the Bureau of Labor Statistics on Friday.

While it is higher than economists’ forecast of 1.6 percent based on the FactSet estimate for August, the annual rate was upwardly revised from 1.7 percent estimated earlier. Therefore, prices were still lower in September.

Month on month, prices were also stable, as energy price decline outweighed a 1% rise in food prices that was the highest since February to bring about overall goods price decrease. However, the BLS reported that during the same period, the price of services went up by 0.2%.

Excluding foods and energy, the core PPI increased to 2.8% on an annual basis from 2.6% in the prior month. The core index, on a monthly basis, increased by 0.2%.

Today’s PPI was a palindromic result and right or wrong, on balance, it is set to cure immediate inflation apprehension in the wake of yesterday’s Consumer Price Index (CPI), said Chris Larkin, managing director of trading and investing for E*Trade in his Friday commentary.

PPI is an important figure because it is mostly viewed as a leading sign of price surge that consumers may endure. If there are increased costs in raw materials and the completely manufactured products, then there may be an upstream transmit of these costs to consumers, this is not always so.

Thursday saw the newest CPI, average price changes for frequently bought items and service, reveal an inflation rate of 2.4% only in September, the industry’s lowest since February 2021.

The small uptick in core PPI was anticipated, particularly the base effects since the prior year period posted a deeper disinflation track and improved demand levels.

Third quarter growth as well as some of the inventory buildup that was done in anticipation of a potential port strike where absorbed Joe Brusuelas, chief economist, told CNN on Thursday. “This has created a bit of pressure in the way it has priced its products but these are factors that are volatile in the future.”

On this score, the overall perspective for inflation, Brusuelas noted, remains positive.

“Consumer price inflation remains to decline,” he said. “This has provided an environment in which the Federal Reserve is sure it will achieve the inflation rate of 2%.”

Last month major prices rose at a slightly slower rate and some indicators pointed to a deteriorating job market, the Fed reduced the benchmark interest rate target by a half a percentage point and said it expected to lower it by one quarter of a point at least twice before year-end.

This latest inflation data ensures that those potential rate cuts remain in play, said Brusuelas.

Overall, US inflation has decelerated greatly from its peak in the summer of 2022 and is now rising at a peculiar rate to that targeted by the Federal Reserve. Consequently, the Federal Reserve has looked to protect a key second half of its dual mandate – a healthy labor market.

However, it has been become less clear after the jobless rate dropped more than forecasted in September while hurricanes and tension in Middle East raised expectation of higher prices.

“The main thing to look for before the year end is of course the twin hurricanes and their effect on the Supply chain and transport,” Brusuelas said. “This could lead to a slight raging of inflationary pressure until these are overcome temporarily by the above constraints.