Producer prices rise more than expected
U.S. producer prices rose more than expected in October, driven by a surge in the cost of services, leading to the biggest annual increase in wholesale inflation in more than 51/ years.
2 Tuesday’s report from the Labor Department also showed steady gains in underlying producer prices, which supported expectations of a gradual increase in inflation and keep the Federal Reserve on track to raise interest rates in December.
The producer price index for final demand increased 0.4 percent last month after a similar gain in September. That lifted the year-on-year increase in the PPI to 2.8 percent, the largest rise since February 2012, from 2.6 percent in September.
Economists had forecast the PPI edging up 0.1 percent last month and increasing 2.4 percent from a year ago. Last month’s rise in prices received by the nation’s farms, factories and refineries reflected a 0.5 percent surge in the cost of services, mostly margins received by wholesalers and retailers.
Outside of services, producer price increases were fairly broad last month.