U.S. producer prices continued to rise in October, but at a slower monthly pace even as the annual rate of inflation accelerated to a multi-year high. The Bureau of Labor Statistics reported that the Producer Price Index for final demand increased 0.3% in October, a notable deceleration from the 1.4% gain recorded in September and the 0.4% rise in August.
On a year-over-year basis, however, producer prices moved higher at a much faster rate. Final demand prices were up 6.5% compared with October a year earlier, marking the largest annual increase since November 2022. This divergence between moderating monthly gains and a stronger annual advance underscores the cumulative impact of recent price pressures working through the supply chain.
Core producer prices, which exclude the more volatile food, energy and trade services components, advanced 0.5% in October. That matched September's monthly increase. Over the past 12 months, this core measure rose 4.9%, pointing to persistent underlying cost pressures beyond headline swings in commodity and trade-related categories.
Goods prices contributed significantly to the overall move. Prices for final demand goods rose 0.5% in October following a much sharper 2.5% jump in September. Within that category, food prices increased 1.3%, while energy prices edged down 0.1%, offering a modest offset. Goods prices excluding food and energy also climbed 0.5% and were responsible for more than 60% of the total increase in goods prices for the month.
On a 12-month basis, goods prices were 10.2% higher than a year earlier, representing the largest annual gain since October 2022. This indicates that goods-producing sectors continue to experience elevated input and output costs even as the pace of monthly increases has recently moderated.
Service-sector pricing also moved higher in October. Prices for final demand services rose 0.2%, marking the fifth straight monthly increase. Transportation and warehousing costs were a major driver, rising 2% and accounting for roughly three-quarters of the overall advance in services prices. Within that component, truck freight prices increased 3.9%, while margins for trade services slipped 0.2%, partially tempering the broader services gain.
Together, the October data highlight a mixed inflation picture for producers: slower month-to-month gains compared with September, but the strongest annual increases in several key categories in nearly four years, led by goods inflation and continued upward pressure in transportation and warehousing costs.
