U.S. producer prices rose 0.3% in October, the Bureau of Labor Statistics said on Friday, coming in cooler than the 0.4% increase economists had expected and easing sharply from September's surge.
The index for final demand climbed 6.5% from a year earlier, below the 6.6% consensus forecast but up from 6.3% in September — the fastest annual pace since late 2022. September's monthly gain was revised up to 1.4% from 1.3% in the original report.
Core producer prices, which strip out volatile food and energy costs, also rose 0.3% on the month, matching expectations. The core annual rate held steady at 5.0%, unchanged from September.
The October reading marks a sharp cooldown from September, when producer prices jumped 1.3% in a single month — the largest gain since March 2022 — driven largely by a 10.8% surge in energy prices.
The report is the last major inflation reading before the Federal Reserve's December 8-9 meeting, where markets expect a rate hike. Producer prices feed into the Fed's preferred inflation gauge, the core PCE price index, which the Commerce Department publishes on November 25. Consumer prices, reported earlier, rose 0.4% in October.
Economists will now watch whether the cooler producer-price print tempers expectations for the size of the Fed's December move, with several officials having argued in recent weeks that higher rates are still needed to bring inflation back toward the central bank's 2% target.
