Wholesale Prices Rose 0.3% in October, Annual Rate Hits 6.5%
The producer price index rose a seasonally adjusted 0.3% in October, below the 0.4% forecast, while the 12-month rate reached 6.5%, the highest since November 2022.
The U.S. Bureau of Labor Statistics said Friday that the producer price index for final demand rose 0.3 percent in October, seasonally adjusted, against a 0.4 percent consensus. Final demand prices had advanced 1.4 percent in September. On an unadjusted basis, the index rose 6.5 percent over 12 months, the largest such rise since November 2022.
Leading the October advance, the index for final demand goods rose 0.5 percent, while prices for final demand services moved up 0.2 percent. Core PPI, which strips out food and energy, posted a 0.3 percent gain, meeting expectations. The index for final demand less foods, energy, and trade services rose 0.5 percent in October, the same as in September, and advanced 4.9 percent over 12 months.
Goods prices increased 0.5 percent in October, with more than 60 percent of that move driven by goods excluding food and energy, which actually fell 0.1 percent. On an annual basis, the goods index jumped 10.2 percent, the biggest 12-month surge since October 2022. Food prices rose 1.3 percent, while energy prices edged down 0.1 percent.
Final demand services prices increased 0.2 percent, most of it linked to transportation and warehousing services, within which truck transportation of freight rose 3.9 percent. Intermediate processed goods prices soared 14.6 percent from October 2025, the biggest annual gain since July 2022.
Markets are fully pricing in a quarter percentage point increase in the Federal Reserve's key overnight rate when the Fed meets Dec. 8-9, with slight odds of a half-point hike. Chris Zaccarelli, chief investment officer at Northlight Asset Management, said the PPI data showed some signs of improving but was still too high, and was unlikely to change the Fed's December approach because the CPI data was already outside its comfort zone. Austan Goolsbee, president of the Chicago Fed, said inflation has proved far more persistent than predicted from the supply shocks, with progress stalled across categories not driven by oil or tariffs.
The report comes just a few weeks ahead of the Fed's next policy meeting, Dec. 8-9. Earlier in the week, the BLS reported that headline CPI rose 0.4 percent in October and core 0.3 percent, both 0.1 percentage point above expectations.