U.S. Producer Prices Rise 0.3% in October; Annual 6.5% Increase Highest in Four Years

[Financial News correspondent Lee Byung-chul in New York] The U.S. producer price index rose at a slower rate than markets had expected in October. However, its annual rate of increase climbed to its highest level in about four years, heightening concerns that inflation will persist.
The U.S. Bureau of Labor Statistics (BLS) said on the 13th (local time) that the Producer Price Index (PPI) rose 0.3% in October from the previous month. That was below the market forecast of 0.4%. The core PPI, which excludes food and energy, rose 0.3%, in line with expectations.
By contrast, the PPI’s year-over-year increase reached 6.5%, up 0.2 percentage points from the previous month. This was the highest level since November 2022. Goods prices in particular surged 10.2% from a year earlier, the largest increase since October 2022.
Detailed indicators also showed upward price pressures. The PPI excluding food, energy and trade services rose 0.5% from the previous month. Prices for final-demand services rose 0.2%, while prices for freight truck transportation services surged 3.9%.
Prices for processed intermediate goods rose 14.6% from a year earlier, the largest increase since July 2022. Prices for intermediate-demand services also rose 6.9%, their biggest increase since November 2022. Analysts say price pressures arising at the production stage could be passed on to consumer prices in the future.
The October Consumer Price Index (CPI), released earlier, also exceeded market expectations. The headline CPI rose 0.4% from the previous month and the core CPI rose 0.3%, each 0.1 percentage point higher than expected.
Concerns are growing within the Federal Reserve that rising prices are becoming entrenched across the economy, rather than reflecting a temporary supply shock. The rise in oil prices due to the Iran war and the burden of tariffs imposed by the Trump administration are spreading beyond energy and imports to prices for other goods and services.
Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said in an interview with CNBC that day, “We are already seeing signs that problems have been occurring for several consecutive months.” He noted, “Even in items unaffected by oil prices or tariffs, progress on price stability has stalled, and in some cases things are actually moving in the wrong direction.”
The market’s attention is focused on the Federal Open Market Committee (FOMC), which meets on the 8th and 9th of next month. Financial markets are pricing in virtually a 100% chance that the Fed will raise its benchmark interest rate by 0.25 percentage points. Some are also raising the possibility of a 0.5-percentage-point increase.




[email protected] Correspondent Lee Byung-chul Reporter