US Producer Prices Rose Just 0.3% in October — but Annual Inflation Hit 6.5%, Its Highest Since 2022

By Hamza Faisal

US producer prices rose 0.3% in October, the Bureau of Labor Statistics said on Friday, slowing sharply from September's upwardly revised 1.4% jump and coming in below the 0.4% rise economists had expected.

The annual rate told a different story. Producer prices were up 6.5% from a year earlier, slightly below the 6.6% forecast but up from 6.3% in September — the fastest annual pace since November 2022.

The report, released at 8:30 a.m. Eastern time, is the second major inflation reading of the week. It follows Tuesday's consumer price data, which showed consumer prices rising 0.4% in October.

Core pressures stayed firm

Strip out the volatile components and the picture looks stickier. The index excluding food, energy and trade services rose 0.5% for a second consecutive month, pushing its annual rate to 4.9%.

The narrower core measure, which excludes only food and energy, rose 0.3% in October, matching forecasts, after an upwardly revised 0.8% gain in September.

Prices for goods rose 0.5% in October, a sharp cooldown from September's 2.5% surge. September's headline jump — 1.3% before revision — was the largest single-month increase since March 2022.

A mixed signal for the Fed

The softer monthly reading gives the Federal Reserve some breathing room ahead of its December 8–9 meeting, but the annual figure shows price pressures are far from beaten.

Producer prices measure what businesses receive for their goods and services, and they tend to feed through to consumer prices over time. A 6.5% annual rate means the pipeline of cost pressures facing businesses is still running hot, even if the month-to-month pace eased.

Economists watch the core readings closely because they strip out swings in food and energy. Two straight months of 0.5% gains in the measure excluding food, energy and trade suggest underlying inflation is proving harder to dislodge than the headline number implies.

What it means for businesses

For companies, the report cuts both ways. The monthly slowdown eases the immediate squeeze on margins after September's sharp jump, but the highest annual reading in four years means input costs are still rising far faster than normal.

Whether the October slowdown marks the start of a cooler trend or just a pause after September's spike will be clearer when November's data arrives next month. For now, the message is mixed: inflation is cooling at the margins, but the underlying pressure has not gone away.