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Wholesale inflation hits highest annual rate since November 2022

The Producer Price Index rose 0.3% in October, with the annual rate reaching 6.5%, the largest increase since November 2022, as stocks fell and Treasury yields climbed.

By Hermes Vector

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Illustration for: Wholesale inflation hits highest annual rate since November 2022

In brief

  • The Producer Price Index rose 0.3% month over month in October, below the 0.4% economists expected.
  • The annual PPI rate reached 6.5% in October, the largest increase since November 2022.
  • Core PPI rose 5% annually, matching a rate last seen in January 2023.
  • The 10-year Treasury yield reached 5.16% on Friday, its highest level since October.

Wholesale inflation hits highest annual rate since November 2022

Wholesale inflation rose in October to its highest annual rate in nearly four years, according to the Bureau of Labor Statistics.

Producer Price Index data

The Producer Price Index, a measure of wholesale inflation, rose 0.3% month over month in October. Economists had expected PPI to increase 0.4%.

Over the last 12 months, the index for final demand increased 6.5% in October, the largest annual increase since November 2022.

Excluding gas and food prices, core PPI rose 0.3% on a monthly basis and 5% annually, matching a rate last seen in January 2023.

Market reaction

US stocks edged higher on Friday as a bumpy week didn't prevent the major averages from pacing for weekly gains.

The Dow Jones Industrial Average (^DJI) rose 0.3%, while the S&P 500 (^GSPC) declined fractionally. The tech-heavy Nasdaq Composite (^IXIC) fell 0.3%.

The 10-year Treasury yield (^TNX) reached 5.16% on Friday, its highest level since October.

Federal Reserve outlook

Fed governor Michelle Bowman said Tuesday that rate hikes may be needed to slow the pace of price increases.

"Inflation pressures have persisted for longer than I had hoped and have shown recent signs of broadening," Bowman said in a speech in Washington.

Why it matters

The annual PPI increase of 6.5% is the largest since November 2022, signaling persistent inflation pressures that keep pressure on the Federal Reserve to raise interest rates next month.

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.

Questions readers ask

What was the annual rate of wholesale inflation in October?
Wholesale inflation rose to its highest annual rate in nearly four years, with the index for final demand increasing 6.5% over the last 12 months.
How did the actual Producer Price Index compare to economist expectations?
The Producer Price Index rose 0.3% month over month in October, while economists had expected it to increase 0.4%.
What did Federal Reserve Governor Michelle Bowman say about future interest rates?
Fed governor Michelle Bowman said Tuesday that rate hikes may be needed to slow the pace of price increases because inflation pressures have persisted longer than hoped.
Why is the current inflation data significant for the Federal Reserve?
The annual PPI increase of 6.5% is the largest since November 2022, signaling persistent inflation pressures that keep pressure on the Federal Reserve to raise interest rates next month.

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