US Producer Prices 'Surprise Drop' in October...0.5% MoM Decline

U.S. producer prices unexpectedly fell in one month.

According to the U.S. Department of Labor on the 14th (local time), the Producer Price Index (PPI) for October, which represents wholesale prices, decreased by 0.5% compared to the previous month. This was a surprising decline, contrary to the expert forecast of a 0.1% increase compiled by The Wall Street Journal (WSJ). This drop is the largest since April 2020 (-1.2%).

Compared to the same month last year, it rose by 1.3%. This also fell far short of the expert forecast of 1.9%. The core PPI, which excludes volatile energy and food, rose 0.1% month-over-month and 2.9% year-over-year.

Considering that increases in wholesale prices typically pass through to consumer prices later, this report is analyzed as a signal that inflationary pressures are continuously easing. Following the Consumer Price Index (CPI) report released the previous day, which showed a slower-than-expected increase, the confirmation of a slowing inflation trend with the PPI has strengthened expectations that the Federal Reserve's tightening cycle may be coming to an end.