Producer prices in the U.S. crept up by much less than expected in the month of October, according to a report released by the Labor Department on Tuesday.
The Labor Department said its producer price index for final demand inched up by 0.2 percent in October, matching a revised uptick in September.
Economists expected producer prices to climb by 0.5 percent compared to the 0.4 percent increase originally reported for the previous month.
The report also showed the annual rate of producer price growth slowed to 8.0 percent in October from 8.4 percent in September. The year-over-year growth was expected to edge down to 8.3 percent.
The modest monthly increase in producer prices came as a 2.7 percent surge in energy prices contributed to a 0.6 percent advance in prices for goods.
Meanwhile, the Labor Department said prices for services fell for the first time since November 2020, edging down by 0.1 percent amid decreases in prices for trade and transportation and warehousing services.
The report also said producer prices excluding foods, energy, and trade services crept up by 0.2 percent in October after rising by 0.3 percent in September.
The annual rate of growth for prices excluding foods, energy, and trade services slowed to 5.4 percent in October from 5.6 percent in September.
“Though today’s reading and last week’s CPI report show prices are heading in the right direction, the Fed is still on pace to raise rates another 50bps in December, with a smaller increase possible in February, as it seeks to bring down inflation markedly,” said Matthew Martin, U.S. Economist at Oxford Economics.
The Labor Department released a separate report last Thursday showing U.S. consumer prices increased by less than expected in the month of October.
The report showed the consumer price index rose by 0.4 percent in October, matching the increase seen in September. Economists had expected consumer prices to climb by 0.6 percent.
The annual rate of growth in consumer prices slowed to 7.7 percent in October from 8.2 percent in September. The year-over-year increase was the smallest since January and came in below estimates for an 8.0 percent jump.
The Labor Department also said core consumer prices, which exclude food and energy prices, edged up by 0.3 percent in October after advancing by 0.6 percent in September. Economists had expected core prices to rise by 0.5 percent.
The annual rate of growth in core prices also slowed to 6.3 percent in October from 6.6 percent in September, coming in below estimates for 6.5 percent growth.
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