12-Month Wholesale Inflation Reaches 4-Year High

The Producer Price Index (PPI) for final demand rose 0.3% in October after advancing 1.4% in September and 0.4% in August, the Bureau of Labor Statistics (BLS) said in a Friday (Nov. 13) press release.

The October advance was driven by prices for final demand goods, which increased 0.5%. Prices for final demand services rose 0.2%, according to the release.

Over 60% of the advance in the index for final demand goods was attributable to prices for final demand goods less food and energy, while three-quarters of the rise in the index for final demand services was driven by an increase in prices for final demand transportation and warehousing services, the release said.

For the 12 months ended in October, the index for final demand increased 6.5%. That was the largest 12-month rise seen since November 2022, when the index rose 7.4%, per the release.

CNBC reported Friday that the 0.3% increase in the PPI was less than expected. The Dow Jones consensus forecast a 0.4% increase, according to the report.

Still, together with the consumer price index the BLS released earlier this week, the PPI shows that the Fed has not achieved its inflation goal of 2%, per the report.

“Today’s PPI data—which shows some signs of improving, albeit still too-high—is unlikely to change the Fed’s approach in December because the CPI data was already outside their comfort zone,” Chris Zaccarelli, chief investment officer for Northlight Asset Management, said in the CNBC report.

Bloomberg reported Friday that the 6.5% annual increase in the PPI showed that price pressures remain throughout the economy and that the surge in energy prices as well as robust demand continue to fan inflationary pressures.

“Transportation costs are the channel through which energy prices bleed through into core goods prices,” Carl Weinberg, chief economist at High Frequency Economics, said in a note, according to the report.

PYMNTS reported Tuesday (Nov. 10) that the BLS said the Consumer Price Index rose a seasonally adjusted 0.4% in October after a 0.6% increase in September. The report noted that food prices rose 0.5% after holding steady the month before.