U.S. Import and Producer Prices See Sharpest Annual Rise Since 2022

U.S. import, export, and producer prices all posted their largest annual increases since 2022, according to government data released Thursday and Friday. The data signal persistent inflationary pressures across the economy, raising concerns that higher costs for businesses and consumers could linger in the months ahead.

The latest figures underscore the challenge facing policymakers as energy and transportation costs continue to drive up prices. Some firms are absorbing these higher expenses rather than passing them on to customers, but the overall trend suggests inflation remains a significant risk.

The surge in prices comes as the Federal Reserve prepares for its next policy meeting at the end of October. The central bank is weighing whether to adjust interest rates again after a quarter-point hike in September, which was aimed at curbing inflation.

Import and Export Price Increases

Import prices rose 1.1% from August to September and 8.1% over the past year, marking the sharpest 12-month increase since July 2022. Fuel imports were the primary driver, with prices jumping 4.8% in September alone and soaring 34.5% year-over-year. Notably, imported natural gas prices surged 96.5% over the past year, the largest annual increase since June 2022.

Energy market data reflected these trends. Brent crude oil averaged about $114 per barrel in September, up from $91 in August. U.S. retail gasoline prices also climbed, reaching $4.35 per gallon, according to the Energy Information Administration.

Orphe Divounguy, founder of the Quantitative Research Group, attributed much of the import price surge to energy. “Fuel is driving roughly 40% of September’s import price surge,” Divounguy said. Nonfuel import prices also increased, rising 0.7% for the month and posting their largest annual gain since April 2022.

Export prices also saw significant increases. They rose 2.2% in September and 11.6% over the past year, the highest annual rise since July 2022. While higher export prices can benefit U.S. businesses by boosting revenues from overseas sales, they may also make American goods less competitive in global markets, potentially impacting export volumes.

Producer Prices and Business Sentiment

The Producer Price Index (PPI), which tracks prices charged by U.S. businesses for goods and services, rose 1.3% in September. This represents the largest monthly gain since March 2022. Over the past year, the PPI climbed 6.3%, the biggest annual jump since December 2022.

Divounguy noted that energy accounted for about half of the producer price increase, with transportation and retail margins contributing another third. “My analysis estimates that energy accounted for about half the increase, while transportation and wholesale and retail margins added another third,” he said.

Regional business sentiment has also weakened. In the New York-Northern New Jersey region, the Federal Reserve Bank of New York's October Business Leaders Survey showed deteriorating conditions. The business activity index fell 12 points to -20.7, its lowest level since March. According to the survey, 42% of respondents reported worsening conditions, while only 22% saw improvement. Although employment levels remained steady, firms became more pessimistic about the outlook for the next six months. The expectations index turned negative for the first time since December 2025, indicating growing concern about future business conditions.

Firms Absorbing Rising Costs

The survey found that 71% of firms reported paying higher prices for goods and services, but only 40% raised prices for their customers. This suggests that a significant portion of businesses are absorbing increased costs rather than passing them on. Divounguy noted that while the survey does not quantify the extent to which costs are being absorbed, the trend is clear. Firms reported raising selling prices at the fastest pace since 2022, even as overall business activity declined, highlighting the pressure many companies face in balancing costs and competitiveness.

Fed Rate Decision Looms

The Federal Reserve's interest rate-setting committee is scheduled to meet at the end of October to consider its next move. Policymakers will decide whether to raise, lower, or hold rates steady in response to the latest inflation data and broader economic trends. Divounguy commented, “I still favor holding rates in October, but it’s a closer call. The risk is that these cost increases keep spreading and people begin expecting inflation to stay higher for longer.”

The Fed last raised its benchmark rate by a quarter point in September, bringing it to a range of 3.75% to 4%. Federal Reserve officials have not yet commented on the latest inflation data or signaled their intentions ahead of the upcoming meeting. The decision will be closely watched by markets, businesses, and consumers alike, as persistent inflation could influence the central bank’s policy path for the remainder of the year.