US wholesale prices rose 0.3% in October, less than the 0.4% forecast, but the annual rate hit 6.5%, the highest since November 2022. The data keeps pressure on the Federal Reserve ahead of its December meeting, where markets are fully pricing in a rate increase.
The producer price index rose a seasonally adjusted 0.3% in October, against a Dow Jones consensus for 0.4%, the Bureau of Labor Statistics reported Friday. Core PPI, which strips out food and energy, posted a 0.3% gain, in line with expectations.
Monthly cooling sits beside a faster annual pace. Headline PPI accelerated 6.5% from a year earlier, up 0.2 percentage point from the prior reading. According to ActionForex, the annual figure rose from 6.3% and came in just below the 6.6% expected.
Underlying prices stay firm
Stripping out food, energy and trade services, PPI rose 0.5% in October. Goods prices increased 0.5%, and goods excluding food and energy, which fell 0.1%, accounted for more than 60% of that move, according to CNBC.
Final demand services prices rose 0.2%, mostly on transportation and warehousing, including a 3.9% gain in truck transportation of freight. Reuters, via Investing.com, noted that services advanced for the fifth straight month.
Fed hike expected in December
The report arrives ahead of the Fed's next policy meeting on Dec. 8-9. CNBC reported that markets are fully pricing in a quarter percentage point increase, with slight odds of a half-point hike. Reuters said the Fed left its benchmark rate in the 3.75%-4.00% range last month.
Chicago Fed President Austan Goolsbee spoke to CNBC on Friday. According to CNBC, he said: "lately we're not making any progress, and if anything, it's going the wrong way". Policymakers are beginning to worry that inflation tied to the Iran war and tariffs is spreading through the economy, CNBC reported.
Sources: CNBC, ActionForex, Investing.com
Trading involves risk.
Risk Disclaimer
