U.S. Supplier Price Increases Eased in October, Taking Pressure Off Inflation
U.S. supplier price increases slowed in October for the second straight month, a sign inflation pressures could be abating.
The producer-price index, which generally reflects supply conditions in the economy, climbed 8% on a 12-month basis in October, the Labor Department said Tuesday. That marked a slight easing from September’s revised 8.4% increase, and was down sharply from the 11.7% increase in March, the highest since records began in 2010.
Consumer price increases also eased last month, the Labor Department said last week. The consumer-price index rose 7.7% in October from the same month a year ago, down from 8.2% in September and June’s 9.1% rate, which was the highest in four decades.
On a monthly basis, the PPI increased 0.2% in October from September, the Labor Department said on Tuesday. That was the same as the revised 0.2% increase in September, and matched the average monthly gain in the two years before the pandemic.
Investors are watching inflation trends for clues on the pace of Federal Reserve interest-rate increases. The central bank faces the tough challenge of tightening monetary policy enough to ease inflation and cool the economy without triggering a recession.
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What does the October producer-price index suggest to you about the state of the economy? Join the conversation below.
Officials in early November increased their benchmark federal-funds rate by 0.75 percentage point—their sixth increase this year—bringing it to a range between 3.75% and 4%.
Fed Chairman
Jerome Powell
indicated in early November that robust consumer demand, a tight labor market, and more persistent price pressures could compel officials to lift rates next year to slightly higher levels than they had projected in September. Back then, most estimated that the fed-funds rate would increase to between 4.5% and 5% early next year.
PPI captures what suppliers are charging businesses and other customers. It generally reflects the changes in costs that producers are facing combined with the pricing power they command—which, in turn, can indicate inflationary pressure building throughout the production pipeline.
Easing producer prices signaled a slight improvement in supply problems that had driven much of the leap in prices since early 2021.
The so-called core price index—which excludes the often-volatile categories of food, energy and supplier margins—climbed 0.2% in October from a month earlier, after gaining a revised 0.3% in September. That pace was down markedly from the 1.0% monthly gain in March. On a 12-month basis, core PPI eased to 5.4%, from 5.6% in both September and August.
Write to Gwynn Guilford at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
U.S. supplier price increases slowed in October for the second straight month, a sign inflation pressures could be abating.
The producer-price index, which generally reflects supply conditions in the economy, climbed 8% on a 12-month basis in October, the Labor Department said Tuesday. That marked a slight easing from September’s revised 8.4% increase, and was down sharply from the 11.7% increase in March, the highest since records began in 2010.
Consumer price increases also eased last month, the Labor Department said last week. The consumer-price index rose 7.7% in October from the same month a year ago, down from 8.2% in September and June’s 9.1% rate, which was the highest in four decades.
On a monthly basis, the PPI increased 0.2% in October from September, the Labor Department said on Tuesday. That was the same as the revised 0.2% increase in September, and matched the average monthly gain in the two years before the pandemic.
Investors are watching inflation trends for clues on the pace of Federal Reserve interest-rate increases. The central bank faces the tough challenge of tightening monetary policy enough to ease inflation and cool the economy without triggering a recession.
SHARE YOUR THOUGHTS
What does the October producer-price index suggest to you about the state of the economy? Join the conversation below.
Officials in early November increased their benchmark federal-funds rate by 0.75 percentage point—their sixth increase this year—bringing it to a range between 3.75% and 4%.
Fed Chairman
Jerome Powell
indicated in early November that robust consumer demand, a tight labor market, and more persistent price pressures could compel officials to lift rates next year to slightly higher levels than they had projected in September. Back then, most estimated that the fed-funds rate would increase to between 4.5% and 5% early next year.
PPI captures what suppliers are charging businesses and other customers. It generally reflects the changes in costs that producers are facing combined with the pricing power they command—which, in turn, can indicate inflationary pressure building throughout the production pipeline.
Easing producer prices signaled a slight improvement in supply problems that had driven much of the leap in prices since early 2021.
The so-called core price index—which excludes the often-volatile categories of food, energy and supplier margins—climbed 0.2% in October from a month earlier, after gaining a revised 0.3% in September. That pace was down markedly from the 1.0% monthly gain in March. On a 12-month basis, core PPI eased to 5.4%, from 5.6% in both September and August.
Write to Gwynn Guilford at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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