| Advertisement |
Nov. 15 (UPI) -- Wholesale prices increased by 0.2% in October, a lower-than-expected number, according to data released on Tuesday by the U.S. Bureau of Labor Statistics. The seasonally adjusted Producer Price Index had been forecast by the Dow Jones to climb by 0.4% increase but grew at half that rate, boosting hopes that U.S. inflation could be peaking.
Advertisement
The PPI is a measure of the prices companies get for finished goods in the marketplace.
The index climbed 8% in October on a year-over-year basis, compared to an 8.4% increase in September.
A 0.1% decline in the services component of the index is a big reason for the lower-than-expected numbers. It is the first outright decline for that sector since November 2020.
This comes days after the Consumer Price Index grew by a lower-than-expected number in October. The CPI had its lowest annual increase since January, sending American markets soaring.
The CPI is a key indicator of U.S. inflation.
Tuesday's PPI news also sends a signal that U.S. inflation could be waning.
The U.S. Federal Reserve has repeatedly raised the benchmark interest rate by 0.75 percentage point in an attempt to curb inflation. The PPI news could signal the Fed may ease monetary policy when its Federal Open Market Committee next meets in December.
"The PPI read certainly adds more fuel to the fire for those who feel we may finally be on a downward inflation trend," Morgan Stanley's head of model portfolio construction Mike Loewengart said in a statement.
"There's more good news for our economy this morning, and more indications that we are starting to see inflation moderate," President Joe Biden said in a statement issued by the White House on Tuesday.
"Today's news -- that prices paid by businesses moderated last month -- comes a week after news that prices paid by consumers have also moderated. And, today's report also showed that food inflation slowed -- a welcome sign for family's grocery bills as we head into the holidays."
