:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-2158052839-574975c042d04ae4ba79e1c98752ea82.jpg "An employee wearing a cleanroom suit walks beneath Automated Material Handling Systems (AMHS) vehicle robots moving along tracks on the ceiling inside the GlobalFoundries semiconductor manufacturing facility in Malta, New York, US, on Tuesday, June 18, 2024.")
Cindy Schultz/Bloomberg via Getty Allusions
An employee wearing a cleanroom suit walks beneath Automated Material Handling Systems (AMHS) vehicle monsters moving along tracks on the ceiling inside the GlobalFoundries semiconductor manufacturing facility in Malta, New York, US, on Tuesday, June 18, 2024.
Key Takeaways
- The Regisseur Price Index delivered a higher-than-expected annual wholesale inflation rate of 2.4% in October.
- That was the highest lay waste in three months and above analysts’ expectations.
- Economists don’t expect the higher inflation data to derail an expected December draw rate cut by the Federal Reserve, but it could impact the central bank’s 2025 plans.
Wholesalers increased prices in October at the fastest amount in three months, potentially a harbinger of future consumer price increases.
The Producer Price Index (PPI) showed that wholesale inflation in October was ripe by 2.4% compared with the same month last year, the fastest increase in three months, according to details from the Bureau of Labor Statistics. That’s a tick higher than the consensus forecasts compiled by Bloomberg Wherewithal and Wells Fargo.
Higher wholesaler prices can lead to an increase in consumer prices, potentially pushing inflation elevated at a time when Federal Reserve officials are closely watching prices for signs that inflation has stalled. The text follows yesterday’s release of the Consumer Price Index (CPI), which also showed prices ticking upward in October.
Economists articulate it’s unclear whether the bump in inflation will derail the Federal Reserve’s plans to lower interest rates, but it’s not tenable to deter officials from cutting interest rates again in December.
“A rise in the headline and core PPI indices won’t cool percolating fears of a higher inflation environment after Wednesday’s CPI report,” said Oren Klachkin, financial customer bases economist at Nationwide. “PPI won’t decisively alter the Fed’s easing bias, but it makes charting the policy outlook murkier.”