US Producer Prices Rise 0.3% in October, Up 6.5% From a Year Earlier
US producer prices rose 0.3% in October and 6.5% from a year earlier, the Bureau of Labor Statistics said Friday. The annual rate is the highest since November 2022, and Federal Reserve officials are signaling that an interest rate hike in December is likely.
The US producer price index (PPI) rose 0.3% in October and 6.5% from a year earlier, the Bureau of Labor Statistics said Friday, November 13, 2026. The PPI report showed the highest annual rate since November 2022.
The monthly gain was slightly below the 0.4% economists had forecast. Excluding food and energy, core PPI rose 0.3% on the month, as expected, and 5% on the year.
The Federal Reserve meets December 8-9. Markets fully price in a quarter-point rate increase, with slight odds of a half-point hike. Fed Governor Christopher Waller indicated earlier this week that a half-point move could be necessary.
What drove prices up
The Iran war and the resulting energy supply shock have pushed gas and diesel prices sharply higher in recent months. Fuel did not rise as fast in October as in September, when PPI jumped 1.4% on the month.
Food prices climbed 1.3% in October, the fastest monthly rise since July 2022, after a 1.1% gain in September. Wholesale fresh and dry vegetables rose 26.7%. Trucking freight costs are up nearly 25% from last year, according to the bureau.
Goods prices rose 0.5% on the month and 10.2% on the year, the biggest 12-month surge since October 2022. Final demand services rose 0.2%, mostly from transportation and warehousing, where truck freight transportation gained 3.9%.
Electronic components and accessories are up 31.7% from a year earlier, the highest annual rate on record in data going back to December 1966. Matt Bush, US economist at Guggenheim Investments, said the effect is showing up indirectly in computer, TV and software prices.
What it means for shoppers
Bush said the higher transportation and input costs businesses face now might not reach consumers for another six to eight months. He expects more price increases early next year. "That's when the majority of businesses do their annual price resets," he said.
Chris Zaccarelli, chief investment officer for Northlight Asset Management, said the PPI data is unlikely to change the Fed's approach in December because the consumer price data was already outside its comfort zone. Consumer prices rose 0.4% in October, 0.1 percentage point more than expected.
Boston Fed President Susan Collins said she is seeing evidence of broadening price pressures. She said she thinks "soon some additional firming tightening of policy is appropriate."
Chicago Fed President Austan Goolsbee said Friday that the problem reaches beyond oil and tariffs. "Inflation is rising; it's proved far more persistent than we predicted at the beginning from the supply shocks."
