Producer inflation picks up in October

‘Inflation is political death’: Wesbury

Economist Brian Wesbury, Gary Kaltbaum, and Jim Bianco discuss rising inflation amid a hot market on ‘Making Money’

Producer prices rose at a faster clip in October and at a record annual pace as supply chain bottlenecks and materials shortages continued to put upward pressure on costs.  

The producer price index for final demand increased 0.6% last month, accelerating slightly from the 0.5% gain in September according to the Labor Department. The reading was in line with what analysts surveyed by Refinitiv were expecting.

Prices jumped 8.6% year over year, matching last month’s reading for the largest annual increase on record. Annual price increases have printed at a record pace for seven straight months. 

The index rose 0.4% in October when excluding food, energy and trade. Analysts were expecting a 0.5% increase after a 0.2% jump in September.  

Core prices rose 6.8% year over year, matching estimates.

More than 60% of the October increase was due to the 1.2% jump in prices for goods, while services prices edged up 0.2%.

One-third of the increase in goods prices occurred as energy costs surged 6.7%. Prices for beef and veal declined 10.3%.

Meanwhile, over 80% of the increase in final demand services prices was due to autos and parts, whose prices soared 8.9%.

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Investors will receive another inflation update on Wednesday when the Labor Department releases the October consumer price index. Analysts surveyed by Refinitiv anticipated a 0.6% increase in October and a 5.9% year-over-year gain.

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