Customers shop at a Costco wholesale store in Miami on December 15, 2023.
Joe Reddell | Getty Images News | Getty Images
The U.S. Bureau of Labor Statistics reported on Thursday that wholesale prices rose slightly in October, but were broadly in line with expectations and broadly consistent with the Federal Reserve cutting interest rates again in December.
this producer price indexA measure of how much money producers get from their products rose a seasonally adjusted 0.2% for the month, up a tenth of a percentage point from September but in line with the Dow Jones consensus forecast. On a 12-month basis, the overall wholesale inflation rate was 2.4%.
Excluding food and energy, core PPI rose 0.3%, also one-tenth higher than in September and in line with expectations. The 12-month interest rate is 3.1%.
While the reading was above the Fed’s 2% inflation target, trends point to an overall slowdown in price increases and that inflation is being driven by isolated factors.
Services rose 0.3% for the month, accounting for most of the PPI gain, driven primarily by a 3.6% rise in portfolio management prices. Food prices fell 0.2% this month, while energy prices fell 0.3%. Commodity prices edged up 0.1% after falling in the previous two months.
The market reacted poorly to the news Stock futures It showed a mixed opening, while Treasury yields remained higher.
Traders expect the Fed to cut interest rates by another 25 percentage points at its Dec. 17-18 meeting, following its cuts in September and November. Markets have since priced in the Fed skipping January and slowing the pace of easing through 2025.
After the news was announced, the market’s implied probability of a rate cut in December fell slightly to 76.1%, an area that still indicates a high likelihood of a rate cut, as measured by CME Group’s FedWatch futures prices.
In other economic news Thursday, Department of Labor Report The pace of layoffs continues to slow after a brief surge.
For the week ended November 9, initial jobless claims totaled 217,000, a decrease of 4,000 from the previous period and slightly lower than the 220,000 expected.
The number of people continuing to apply for unemployment benefits was 1.873 million, a decrease of 11,000 from the previous week.
