US wholesale inflation eases to 8%
Published:Tuesday | November 15, 2022 | 11:01 AM
WASHINGTON (AP) — Prices at the wholesale level rose eight per cent in October from a year ago, the fourth straight decline in the rate of increase and the latest sign that inflation pressures in the United States are easing from painfully high levels.
The annual figure is down from 8.4 per cent in September. On a monthly basis, the government said Tuesday that its producer price index, which measures costs before they reach consumers, rose 0.2 per cent in October from September. That was same as in the previous month, which was revised down from an initial reading of 0.4 per cent.
The figures came in lower than economists expected and make it more likely that the Federal Reserve will increase its benchmark interest rate in smaller increments.
It has hiked its short-term rate by three-quarters of a point for four meetings in a row, but economists now increasingly foresee an increase of a half-point at its December meeting.
“The improvement in the October inflation data, if it persists, supports the Fed's expectation of a step down in the pace of increases going forward,” said Rubeela Farooqi, chief US economist at High Frequency Economics, a forecasting firm.
Most of the monthly increase reflected higher gas prices at the wholesale level, which rose 5.7 per cent just in October. The cost of new cars fell 1.5 per cent, last month, which could lead to lower prices at the retail level as well.
Excluding the volatile food and energy categories, core producer prices were unchanged in October from September, the lowest reading in nearly two years. Core prices increased 6.7 per cent last month from a year ago, down from a 7.1 per cent annual rate in September.
The cost of services, such as hotels, air travel, and health care, slipped 0.1 per cent in October from September, the first drop since November 2020.
Follow The Gleaner on Twitter and Instagram @JamaicaGleaner and on Facebook @GleanerJamaica. Send us a message on WhatsApp at 1-876-499-0169 or email us at onlinefeedback@gleanerjm.com or editors@gleanerjm.com.