Prices of U.S.-produced goods and services rose at an even more brisk pace in October, potentially posing a long-term challenge to the Federal Reserve's efforts to bring inflation down to pre-pandemic levels. It suggests that.
The Labor Department said Thursday that the producer price index (PPI), which measures the price producers receive for goods and services, rose 0.2% last month. The report also revised upward producer price growth for September, showing it was at a slightly faster pace than previously expected.
Producer prices rose 2.4% year-on-year through October, up from the annual 1.9% rise in September. The latest figures show the annual growth rate is at its highest level in four months, showing continued inflationary pressures.
Core producer prices, which exclude the volatile food and energy categories, rose 0.3% last month. The 12-month core producer price rate rose to 3.5% from 3.3% in September, underscoring the strength of underlying inflationary pressures.
Meanwhile, consumer inflation also showed signs of rising again. The Consumer Price Index (CPI), which measures the amount consumers pay for various goods and services, rose at an annual rate of 2.6% in October from 2.4% the previous month, the first increase in seven months.
The rise in both wholesale and consumer prices, described by Fed officials as a “bump” in inflation, could dampen Wall Street's hopes for the central bank to quickly ease high interest rates. With inflation proving more resilient than expected, the Fed may need to tread carefully in considering moves to lower borrowing costs in the coming months.
Both the Consumer Price Index and the Producer Price Index are measures of inflation. The CPI measures prices from the perspective of household consumers, so it includes the price of imported goods but excludes the prices governments and businesses pay for consumption and exports. PPI, on the other hand, measures prices from a US perspective. seller. PPI does not include import prices, but does include sales to governments, businesses, and exports.
