U.S. October Producer Price Index rises to 6.5% annual, highest since 2022

The Bureau of Labor Statistics reported on November 13 that the producer price index for final demand rose 0.3% in October on a seasonally adjusted basis, a touch below the 0.4% Dow Jones consensus. The annual picture moved the other way: unadjusted final-demand prices were up 6.5% over the 12 months to October, up from 6.3% in September and the largest 12-month rise since November 2022.

Underlying measures were mixed. PPI excluding food and energy rose 0.3% for the month, matching expectations, while the narrower gauge that also strips out trade services climbed 0.5% for a second straight month and stood 4.9% above a year earlier, per the BLS release. Goods prices did much of the work, rising 0.5% in October and 10.2% year over year, the biggest annual goods increase since October 2022, while services rose 0.2%. September's monthly gain was revised up to 1.4%.

The release lands ahead of the Federal Reserve's December 8-9 meeting, where markets are fully pricing a quarter-point increase in the policy rate with slight odds of a half-point move. A softer-than-forecast monthly print does little to change that math while the annual rate is still accelerating.

What to watch: whether goods-price pressure in the wholesale pipeline passes through to consumer prices in the November data, and how Fed officials frame the December decision. Rate-sensitive sectors and the dollar are likely to stay tied to that path.