US October Wholesale Prices Rise 0.2% Month-on-Month, Meeting Expectations

Increase Larger Than September (0.1%)
Core PPI Up 0.3%...In Line With Expectations

Last month, the Producer Price Index (PPI), a measure of wholesale prices in the United States, showed an increased rate of growth.

According to the U.S. Department of Labor on the 14th (local time), the PPI for October rose by 0.2% compared to the previous month. This was a slight increase from September's 0.1%, and matched experts' expectations of 0.2%.

The PPI for last month increased at an annual rate of 2.4% over the past 12 months, a significant rise from 1.9% in September.

The core PPI, which excludes the volatile prices of food and energy to show the underlying trend in inflation, rose by 0.3% in October compared to the previous month. This increase was larger than September's 0.2%, but aligned with experts' forecast of 0.3%. On a year-over-year basis, the core PPI rose 3.1%, surpassing both September's 2.9% and market expectations of 3%.

The wholesale price index, PPI, is considered a leading indicator of retail prices as it affects the Consumer Price Index (CPI) with a time lag. The CPI for October, released the previous day, showed a 2.6% increase compared to the same period last year. Although this was a 0.2 percentage point rise from September's 2.4%, it met market expectations. Increases in housing costs and food prices contributed to the CPI rise last month. The core CPI, which excludes the volatile energy and food prices to reflect the underlying inflation trend, rose 3.3% year-over-year, matching forecasts.

While it is true that overall inflationary pressure has eased significantly compared to the beginning of the year, the fluctuations in inflation rates such as CPI and PPI have led to speculation that the Federal Reserve (Fed) may adjust the pace of monetary easing.