The Labor Department's producer price index climbed 6.5% year-over-year in October, the largest annual gain since November 2022, after rising 0.3% from September.
By Hermes Vector
US wholesale inflation rose 6.5% year-over-year in October, the largest annual gain since November 2022, according to the Labor Department's Bureau of Labor Statistics. The producer price index rose 0.3% from September to October, down from a 1.4% jump in the previous month.
The PPI for final demand increased 0.3% last month after an upwardly revised 1.4% surge in September. Economists polled by Reuters had forecast the PPI climbing 0.4% after a previously reported 1.3% jump in September.
Producer prices over the month were lifted by a 0.5% rise in goods. Food prices jumped 1.3%, driven by fresh and dry vegetables, chickens, turkeys and roasted coffee. Prices for basic organic chemicals increased 3.9%. Energy prices dipped 0.1%, amid a 7.9% decline in diesel fuel. Still, diesel fuel soared 115.2% on a year-over-year basis in October.
Excluding food and energy, producer goods prices increased 0.5%. These so-called core goods prices accounted for more than 60% of the rise in overall producer goods last month. Goods prices advanced 10.2% in the 12 months through October, the biggest gain in four years.
Services increased 0.2% after accelerating 1.0% in September. These prices have now risen for five straight months. A 2.0% increase in transportation and warehousing services costs, mostly freight transportation by road, accounted for three quarters of the rise in services inflation. The transportation of freight by trucks jumped 3.9%.
There were also increases in the costs of fuels and lubricants retailing, health, beauty and optical goods retailing as well as food and alcohol wholesaling and hospital outpatient care. Hotel and motel room prices increased 2.5%, but airfares dropped 1.2%.
The report followed news this week of a stronger-than-expected increase in consumer prices in October. Friday's report supports the view that the Federal Reserve could continue raising interest rates after next month's widely expected increase.
Wholesale inflation measures price changes before they reach consumers, and the 6.5% annual increase signals continued pressure on consumer prices. The data suggests the Federal Reserve may continue raising interest rates to combat inflation that remains well above its 2% annual target.
Sources
This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.
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