Prices paid to U.S. producers rose by more than forecast in September, bolstered by higher energy costs that continue to wrinkle the path toward sustainably lower inflation.

The producer price index for final demand advanced 0.5% from a month earlier, marking the third-straight increase, according to the Bureau of Labor Statistics. The cost of gasoline increased by 5.4%. Excluding food and energy, the PPI climbed 0.3%.

From a year ago, the overall measure advanced 2.2%.

The prices of goods rose firmly on the back of energy and the strongest advance in food costs in nearly a year. However, excluding those components, they edged up 0.1%. Services costs increased by 0.3%, led by a type of financial services.

A pickup in oil prices — which reached the highest level in over a year in September — is threatening months of progress in taming producer inflation. While crude prices have subsided in recent weeks amid demand concerns, the conflict in Israel risks keeping costs elevated.

Economists at the Federal Reserve and on Wall Street are particularly attuned to the PPI report as several categories — including those related to portfolio management and within healthcare — are used to calculate the Fed’s preferred inflation measure, the personal consumption expenditures price gauge.

Costs of portfolio management and nursing-home care declined while hospital outpatient care picked up.

Fed officials have been alluding to another pause at their next meeting as a recent surge in bond yields may substitute for additional interest-rate hikes, while still stressing that borrowing costs will stay elevated for some time.

The central bank will also see the latest consumer price index report, out October 12, before its meeting that concludes November 1.

What Bloomberg Economics Says...

“Gyrations in oil prices could create pipeline price pressures ahead after producer prices moderated less than expected in September. The Fed will likely proceed carefully amid adverse supply shocks and with annualized core PPI running well above policymakers’ 2% inflation target.”

— Eliza Winger.

Stripping out food, energy and trade services, which is a less-volatile PPI measure, prices rose 0.2% for a second month.

Costs of processed goods for intermediate demand, which reflect prices earlier in the production pipeline, advanced at a slower pace after an energy-related surge in the prior month. Excluding food and energy, processed goods for intermediate demand were little changed.