Wholesale inflation in the US decreased in October for the fourth consecutive month

Wholesale prices in the United States increased 8% in October in relation to the previous year, but it was the fourth consecutive monthly decrease, indicating that inflationary pressures are easing from the high levels reached recently.

The annual figure decreased from 8.4% in September. On a monthly basis, the government said Tuesday that its producer price index, which measures costs before reaching consumers, rose 0.2% in October from September.

That was the same as in the previous month, which was revised down after a reading of 0.4%.

The figures were lower than what economists expected and that could influence the Federal Reserve to increase its interest rate in increments smaller than the three-quarters of a point that it has decided on four consecutive occasions and adopt only half a point at its December meeting. .

“The improved inflation data for October, if it persists, supports the Fed’s expectation to slow the pace of interest increases going forward,” said Rubeela Farooqi, an economist at High Frequency Economics.

Most of the increase in the month reflected gasoline prices at the wholesale level, which rose 5.7% in October alone. The cost of new cars fell 1.5%, which could lead to lower prices at the retail level.

Excluding the volatile categories of food and energy, core wholesale prices were unchanged from September to October, their lowest reading in almost two years. Core prices rose 6.7% last month from a year ago, from an annual rate of 7.1% in September.

The cost of services, such as hotels, air travel, health care, fell 0.1% from September to October, their first decline since November 2020.

Last week’s consumer price report showed that year-on-year inflation decreased in October to 7.7%, from 8.2% in September.

Those figures boosted stock markets, because they suggested that the devastating price increases of the past 18 months may be moderating.

The cost of used cars, clothing and furniture fell, a sign that prices of consumer goods are slipping back from levels reached when supply chain lockdowns triggered inflation.

In recent months, delays at large ports have disappeared, the price of shipping has fallen, and more stores are restocking their warehouses. All of this suggests that the prices of consumer goods could continue to decline.

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