U.S. Producer Prices Rise 0.3% in October as Wholesale Inflation Reaccelerates

U.S. wholesale inflation picked up in October, offering a fresh sign of price pressures in the production pipeline just days after the latest consumer inflation report. The Producer Price Index for final demand rose 0.3% last month on a seasonally adjusted basis, the Labor Department said Friday, while producer prices were up 6.5% from a year earlier, the biggest 12-month increase since November 2022.

“The Producer Price Index for final demand rose 0.3 percent in October, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today,” the agency said. It added that, on an unadjusted basis, final demand prices increased 6.5% over the 12 months ended in October, “the largest 12-month rise since moving up 7.4 percent in November 2022.”

Goods prices drove more of the monthly increase than services. Final demand goods prices rose 0.5% in October, compared with a 0.2% increase in final demand services. Over the past 12 months, goods prices climbed 10.2%, the largest annual increase for that category since October 2022, when it was 10.5%.

A closely watched core measure that strips out foods, energy and trade services rose 0.5% in October and was up 4.9% from a year earlier. That measure is often used to gauge underlying inflation trends because it removes some of the more volatile components.

Within goods, more than 60% of October’s increase came from final demand goods less foods and energy, which rose 0.5%, according to the Bureau of Labor Statistics. Food prices increased 1.3%, while energy prices edged down 0.1%. The agency highlighted a 3.9% increase in basic organic chemicals as one contributor to higher goods prices, while a 7.9% drop in diesel fuel prices helped limit the overall rise. On the services side, three-quarters of the increase came from a 2.0% rise in transportation and warehousing services. The index for services less trade, transportation and warehousing rose 0.2%, while margins for final demand trade services fell 0.2%.

The Producer Price Index measures prices received by domestic producers, rather than the prices consumers pay at the register. That makes it a closely watched gauge of inflation pressures moving through the supply chain and potentially feeding into consumer prices later. Friday’s report arrived three days after the Bureau of Labor Statistics said the Consumer Price Index rose 0.4% in October, giving policymakers and investors another major inflation reading ahead of the Federal Reserve’s next meeting.

The Bureau of Labor Statistics said figures for June through September were revised to reflect late reports and respondent corrections. The new data land before the Fed’s Dec. 8-9 policy meeting, where officials will be assessing incoming inflation readings as they weigh their next steps.