US producer price inflation cools slightly more than expected in October.

Source: Sharecast

The producer price index for final demand increased 0.3% on a seasonally adjusted basis last month, cooling sharply from September's 1.4% jump and coming in below consensus estimates for a 0.4% gain. However, on an unadjusted annual basis, headline PPI accelerated 0.2 percentage points to 6.5% - the highest 12-month rate since November 2022.

Core PPI, which strips out volatile food and energy costs, rose 0.3% month-on-month, matching expectations, while the index excluding food, energy, and trade services climbed 0.5% for the second straight month, leaving it up 4.9% year-on-year.

Leading October's headline advance, final demand goods rose 0.5%, driven by a 1.3% jump in food prices and a 3.9% surge in basic organic chemicals, which more than offset a 7.9% drop in diesel fuel. Final demand services edged up 0.2% for a fifth consecutive monthly gain, underpinned by a 3.9% increase in truck freight transport.

The data lands just weeks before the Federal Open Market Committee's December meeting, where markets have fully priced in a 25-basis-point interest rate hike alongside slight odds of a 50-basis-point move.

Reporting by Iain Gilbert at Sharecast.com