Wholesale prices in October posted their biggest drop in 2½ years, providing another sign that the surge in high inflation may have passed.
The producer price index, which measures the cost of final demand for businesses, fell 0.5% for the month, compared with a 0.1% rise forecast by the Dow Jones consensus, the Labor Department reported on Wednesday. The department said this was the biggest monthly decline since April 2020.
Excluding food and energy prices, core PPI was reported unchanged, and came in below forecasts for a 0.3% increase. Excluding food, energy, and trade services prices, core retail sales rose 0.1%.
The report was released after the Labor Department reported that the consumer price index, which measures the price of goods and services at the consumer level, was unchanged in October from the previous month. This triggered an aggressive surge on Wall Street, where sentiment grew that the Federal Reserve was done raising interest rates and could even begin cutting interest rates in the first half of 2024.
However, consumers in October showed little reaction to prices.
The Commerce Department's preliminary retail sales report for the month showed a 0.1% decline, based on seasonally adjusted figures. Wall Street had even expected a decline of 0.2%.
The US dollar index is still trading strong with a strengthening of 0.21% to a trading level of 104.312.
