Wholesale prices fell 0.5% in October for the biggest monthly drop since April 2020
Grocery items are offered for sale at a supermarket on August 09, 2023 in Chicago, Illinois.
Scott Olson | Getty Images
Wholesale prices in October showed the biggest decline in 2½ years, providing another sign that the worst of the rise in inflation may have passed.
The producer price index, which measures final demand costs for businesses, declined 0.5% for the month, against expectations for a 0.1% increase from the Dow Jones consensus, the Labor Department said Wednesday. The department said that was the biggest monthly decline since April 2020.
Excluding food and energy, core PPI was unchanged, also below the forecast for a 0.3% increase. Excluding food, energy and trade services, the index increased 0.1%.
The report comes a day after the Labor Department said the consumer price index, which measures prices for goods and services at the consumer level, was unchanged in October from the previous month. That launched an aggressive rally on Wall Street, where there is growing sentiment that the Federal Reserve is done raising interest rates and may actually start cutting in the first half of 2024.
However, consumers in October showed some price sensitivity.
The Commerce Department’s preliminary sales report for the month showed a decline of 0.1%, according to a figure that is adjusted for seasonal factors but not inflation. Wall Street had been looking for a decline of 0.2%. Excluding autos, sales rose 0.1%, compared with expectations for an unchanged number.
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