NEW YORK, Nov. 13 (Xinhua) -- U.S. producer prices rose further in October with the annual increase reaching its highest level in nearly four years, according to data released Friday by the U.S. Bureau of Labor Statistics.
The latest inflation print adds to evidence that inflation pressures remain entrenched even as the monthly pace eased from September's surge.
The Producer Price Index (PPI) for final demand rose 0.3 percent in October, seasonally adjusted, after an upwardly revised 1.4-percent surge in September and a 0.4-percent rise in August. Economists polled by Reuters had expected a 0.4-percent month-on-month increase. On an unadjusted basis, the index climbed 6.5 percent from a year earlier, the largest 12-month gain since November 2022, after advancing 6.3 percent in September.
Leading the October advance in final demand prices, the index for final demand goods increased 0.5 percent. Prices for final demand services moved up 0.2 percent. The index for final demand less foods, energy, and trade services, rose 0.5 percent for a second straight month and advanced 4.9 percent for the 12 months ended in October.
Within final-demand goods, food prices rose 1.3 percent and prices for goods excluding food and energy increased 0.5 percent, while energy prices edged down 0.1 percent. Prices for final-demand goods were up 10.2 percent over the year, the largest annual rise since October 2022.
Services prices rose 0.2 percent, a fifth consecutive monthly increase, as transportation and warehousing services jumped 2 percent, while trade margins fell 0.2 percent.
Within goods, prices for basic organic chemicals advanced 3.9 percent. In services, prices for truck transportation of freight also rose 3.9 percent. Meanwhile, diesel fuel prices fell 7.9 percent, while crude petroleum prices dropped 10.3 percent. Prices for processed goods for intermediate demand rose 14.6 percent over the year, the largest 12-month increase since July 2022.
"Today's PPI data -- which shows some signs of improving, albeit still too high -- is unlikely to change the Fed's approach in December because the CPI (consumer price index) data was already outside their comfort zone," said Chris Zaccarelli, chief investment officer at Northlight Asset Management.
The report followed news earlier in the week that consumer prices rose more than expected in October, with core inflation up 0.3 percent for a third straight month. Chicago Federal Reserve President Austan Goolsbee called that data "borderline disturbing," and Fed Governor Christopher Waller had said before its release that a 50-basis-point hike should be considered in December if core prices rose 0.3 percent or more.
In early trading after the release, the 10-year Treasury yield eased a few basis points and U.S. stock futures edged higher. Traders still see a December rate hike as near certain, with markets wavering between a quarter-point move and leaving room for a half-point increase, and pricing in another increase in January, according to CME FedWatch.
Investors next turn to October retail sales scheduled Tuesday and the minutes of the Fed's October meeting on Wednesday.
