Key Notes
- October producer prices rose 0.3%, below the 0.4% forecast.
- Annual producer inflation reached 6.5%, its highest since November 2022.
- September’s monthly increase was revised to 1.4% from 1.3%.
US producer prices rose 0.3% in October, below the 0.4% forecast, as the monthly pace slowed sharply after September’s surge. Annual producer inflation nevertheless climbed to 6.5%, its highest since November 2022.
The Bureau of Labor Statistics released the figures on November 13. The annual increase was slightly below the 6.6% estimate, but above September’s 6.3% rate.
September’s monthly gain was revised to 1.4% from the initially reported 1.3%. That makes October a substantial slowdown from the previous jump, even as the year-over-year comparison strengthened.
Goods and Freight Lead the Increase
Final-demand goods prices increased 0.5%. Food prices rose 1.3%, while energy prices edged down 0.1%. Diesel fuel fell 7.9%, providing some relief after the previous month’s energy surge.
Services prices advanced 0.2%, with three-quarters of the increase attributable to transportation and warehousing, where prices rose 2%. Truck freight prices climbed 3.9%.
Core Prices Rise 0.3%
Excluding food and energy, core producer prices increased 0.3% in October and 5% over the year. The monthly gain matched economists’ expectations.
A separate measure excluding food, energy and trade services rose 0.5% for a second consecutive month. Its annual increase eased to 4.9% from 5% in September. Removing trade services excludes changes in the margins received by wholesalers and retailers.
The Next Fed Decision Is Due in December
The report follows Tuesday’s consumer inflation figures, which showed monthly increases of 0.4% in headline prices and 0.3% excluding food and energy. Both exceeded forecasts by 0.1 percentage point.
The Federal Reserve held rates at 3.75%-4% on October 28. Policymakers next meet on December 8-9, when they will also release updated economic projections.
