'Going the wrong way': U.S. wholesale inflation comes in at fastest pace since 2022
U.S. wholesale inflation accelerated to 6.5%, the highest in almost four years / Photo: leungchopan / Shutterstock
U.S. wholesale prices rose in October at the fastest year-over-year pace since November 2022, adding to evidence of persistent price pressures across the economy, Bloomberg reports. With prices rising so quickly, traders see a December rate hike by the Fed as all but certain. The question is how big the move will be.
Details
The producer price index rose 6.5% versus October 2025, picking up from September, according to data released Friday by the U.S. Bureau of Labor Statistics. The PPI rose 0.3% month over month, below the 0.4% increase economists polled by Dow Jones had expected, CNBC reports.
Excluding food and energy, wholesale prices rose 5% year over year and 0.3% month over month, in line with expectations. Wholesale food prices climbed 1.3% month over month, the biggest increase since February, Bloomberg notes. The conflict in the Middle East, Russia’s war in Ukraine, and tariffs are among the factors driving up food prices, Bloomberg reports.
Several components of the PPI are particularly important to the Fed because they feed into its preferred inflation gauge, the personal consumption expenditures price index, which will come out on November 25.
What’s next
“Today’s PPI data – which shows some signs of improving, albeit still too-high – is unlikely to change the Fed’s approach in December because the CPI data was already outside their comfort zone,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management, as quoted by CNBC.
The CPI rose 0.4% month over month in October, more than analysts had expected, even as price growth slowed from September. For traders, the print all but sealed a rate hike at the Fed’s next meeting in December. CME FedWatch now puts the odds of a 25-basis-point increase at 93.4% and the odds of a 50-basis-point hike at 6.6%.
“We have had signs of trouble now for several months in a row if you look at how broad-based the inflation is,” Chicago Fed President Austan Goolsbee said in a CNBC interview Friday, as quoted by Reuters. He said inflation had been above target for some time. “In categories that are not driven by oil prices and not driven by tariffs, you are still seeing stalled progress and in some cases going the wrong way.”
