Wholesale prices in the U.S. climbed 0.3% in October 2026, pushing the annual inflation rate to 6.5%, the highest level in nearly four years. The increase, while below economists' expectations of 0.4%, followed a revised 1.4% surge in September. The Producer Price Index (PPI) for final demand, which measures prices before they reach consumers, rose less than the 0.4% forecasted by Dow Jones, according to CNBC.
Goods prices surged 0.5% for the month and 10.2% year over year, the largest 12-month increase since October 2022. However, goods excluding food and energy actually decreased 0.1%. Final demand services prices rose 0.2%, extending a five-month streak of increases. Core PPI, excluding food and energy, rose 0.3% month over month and 5% year over year, matching analysts' estimates.
Chicago Federal Reserve President Austan Goolsbee described inflation as broad-based and persistent, noting it has remained above the Fed's 2% target for nearly six years. He attributed the pressure to factors like the Iran war, higher fuel prices, and President Donald Trump's tariffs. The report comes ahead of the Fed's December meeting, where markets are pricing in a quarter-percentage-point rate hike, with some room for a half-percentage-point move.
The stock market futures gained following the PPI release, while Treasury yields moved in mixed directions. The conflicting signals, cooler monthly PPI and hotter annual rate, leave investors and Fed officials with mixed signals ahead of the central bank's final policy decision of the year.