Current:Home > reviewsUS wholesale inflation picks up slightly in sign that some price pressures remain elevated -FundTrack
US wholesale inflation picks up slightly in sign that some price pressures remain elevated
View
Date:2025-04-15 12:25:16
WASHINGTON (AP) — Wholesale prices in the United States rose last month, remaining low but suggesting that the American economy has yet to completely vanquish inflationary pressure.
Thursday’s report from the Labor Department showed that its producer price index — which tracks inflation before it hits consumers — rose 0.2% from September to October, up from a 0.1% gain the month before. Compared with a year earlier, wholesale prices were up 2.4%, accelerating from a year-over-year gain of 1.9% in September.
A 0.3% increase in services prices drove the October increase. Wholesale goods prices edged up 0.1% after falling the previous two months. Excluding food and energy prices, which tend to bounce around from month to month, so-called core wholesale prices rose 0.3 from September and 3.1% from a year earlier. The readings were about what economists had expected.
Since peaking in mid-2022, inflation has fallen more or less steadily. But average prices are still nearly 20% higher than they were three years ago — a persistent source of public exasperation that led to Donald Trump’s defeat of Vice President Kamala Harris in last week’s presidential election and the return of Senate control to Republicans.
The October report on producer prices comes a day after the Labor Department reported that consumer prices rose 2.6% last month from a year earlier, a sign that inflation at the consumer level might be leveling off after having slowed in September to its slowest pace since 2021. Most economists, though, say they think inflation will eventually resume its slowdown.
Inflation has been moving toward the Federal Reserve’s 2% year-over-year target, and the central bank’s inflation fighters have been satisfied enough with the improvement to cut their benchmark interest rate twice since September — a reversal in policy after they raised rates 11 times in 2022 and 2023.
Trump’s election victory has raised doubts about the future path of inflation and whether the Fed will continue to cut rates. In September, the Fed all but declared victory over inflation and slashed its benchmark interest rate by an unusually steep half-percentage point, its first rate cut since March 2020, when the pandemic was hammering the economy. Last week, the central bank announced a second rate cut, a more typical quarter-point reduction.
Though Trump has vowed to force prices down, in part by encouraging oil and gas drilling, some of his other campaign vows — to impose massive taxes on imports and to deport millions of immigrants working illegally in the United States — are seen as inflationary by mainstream economists. Still, Wall Street traders see an 82% likelihood of a third rate cut when the Fed next meets in December, according to the CME FedWatch tool.
The producer price index released Thursday can offer an early look at where consumer inflation might be headed. Economists also watch it because some of its components, notably healthcare and financial services, flow into the Fed’s preferred inflation gauge — the personal consumption expenditures, or PCE, index.
Stephen Brown at Capital Economics wrote in a commentary that higher wholesale airfares, investment fees and healthcare prices in October would push core PCE prices higher than the Fed would like to see. But he said the increase wouldn’t be enough “to justify a pause (in rate cuts) by the Fed at its next meeting in December.″
Inflation began surging in 2021 as the economy accelerated with surprising speed out of the pandemic recession, causing severe shortages of goods and labor. The Fed raised its benchmark interest rate 11 times in 2022 and 2023 to a 23-year high. The resulting much higher borrowing costs were expected to tip the United States into recession. It didn’t happen. The economy kept growing, and employers kept hiring. And, for the most part, inflation has kept slowing.
veryGood! (37512)
Related
- Scoot flight from Singapore to Wuhan turns back after 'technical issue' detected
- Collin Gosselin Says He Was Discharged from the Marines Due to Being Institutionalized by Mom Kate
- Matthew Judon trade winners, losers and grades: How did Patriots, Falcons fare in deal?
- Julianne Hough Shares She Was Sexually Abused at Age 4
- Military service academies see drop in reported sexual assaults after alarming surge
- Jordan Chiles Breaks Silence on Significant Blow of Losing Olympic Medal
- Get 10 free boneless wings with your order at Buffalo Wild Wings: How to get the deal
- Julianne Hough Shares She Was Sexually Abused at Age 4
- Sarah J. Maas books explained: How to read 'ACOTAR,' 'Throne of Glass' in order.
- Kaley Cuoco and Tom Pelphrey announce engagement with new photos
Ranking
- Skins Game to make return to Thanksgiving week with a modern look
- 4 killed in series of crashes on Ohio Turnpike, closing route in both directions
- Kaley Cuoco and Tom Pelphrey announce engagement with new photos
- Matthew Perry's Assistant Repeatedly Injected Actor With Ketamine the Day He Died, Prosecutors Allege
- Cincinnati Bengals quarterback Joe Burrow owns a $3 million Batmobile Tumbler
- Jordan Chiles Breaks Silence on Significant Blow of Losing Olympic Medal
- North Dakota lawmaker dies at 54 following cancer battle
- Never seen an 'Alien' movie? 'Romulus' director wants to scare you most
Recommendation
New data highlights 'achievement gap' for students in the US
As Baltimore’s Sewer System Buckles Under Extreme Weather, City Refuses to Help Residents With Cleanup Efforts
The State Fair of Texas is banning firearms, drawing threats of legal action from Republican AG
2025 COLA estimate dips with inflation, but high daily expenses still burn seniors
SFO's new sensory room helps neurodivergent travelers fight flying jitters
Federal agency says lax safety practices are putting New York City subway workers at risk
Social media celebrates Chick-Fil-A's Banana Pudding Milkshake: 'Can I go get in line now?'
'Unique and eternal:' Iconic Cuban singer Celia Cruz is first Afro-Latina on a US quarter