US producer prices rise further in October
TLT•The Producer Price Index rose 0.3% in October after a revised 1.4% increase in September, and was up 6.5% from a year earlier, its largest annual gain since November 2022.
1. Prices increase again
The Producer Price Index for final demand rose 0.3% in October, below economists’ 0.4% forecast, after September’s increase was revised up to 1.4%. Goods prices rose 0.5%, mostly reflecting food and basic organic chemicals, while services prices increased 0.2% for a fifth straight month.
2. Rate expectations shift
Producer prices were up 6.5% year over year, compared with 6.3% in September. After stronger consumer prices and labor-market data, financial markets were weighing a 25-basis-point or half-percentage-point rate increase in December, and anticipated another increase in January. The Fed left its benchmark overnight rate at 3.75%-4.00% last month.
