US wholesale expense boost picks up slightly in sign that some pressures remain elevated

WASHINGTON — Wholesale prices in the United States rose last month, remaining low but suggesting that the American economy has yet to completely vanquish inflationary pressure.

Thursday’s update from the Labor Department showed that its producer worth index — which tracks expense boost before it hits consumers — rose 0.2% from September to October, up from a 0.1% gain the month before. Compared with a year earlier, wholesale prices were up 2.4%, accelerating from a year-over-year gain of 1.9% in September.

A 0.3% boost in services prices drove the October boost. Wholesale goods prices edged up 0.1% after falling the previous two months. Excluding food and vigor prices, which tend to bounce around from month to month, so-called core wholesale prices rose 0.3 from September and 3.1% from a year earlier. The readings were about what economists had expected.

Since peaking in mid-2022, expense boost has fallen more or less steadily. But average prices are still nearly 20% higher than they were three years ago — a persistent source of community exasperation that led to Donald Trump’s loss of Vice President Kamala Harris in last week’s presidential election and the profitability of Senate control to Republicans.

The October update on producer prices comes a day after the Labor Department reported that buyer prices rose 2.6% last month from a year earlier, a sign that expense boost at the buyer level might be leveling off after having slowed in September to its slowest pace since 2021. Most economists, though, declare they ponder expense boost will eventually resume its slowdown.

expense boost has been moving toward the Federal savings’s 2% year-over-year target, and the central lender’s expense boost fighters have been satisfied enough with the advancement to cut their standard yield rate twice since September — a reversal in policy after they raised rates 11 times in 2022 and 2023.

Trump’s election win has raised doubts about the upcoming path of expense boost and whether the Fed will continue to cut rates. In September, the Fed all but declared win over expense boost and slashed its standard yield rate by an unusually steep half-percentage point, its first rate cut since March 2020, when the pandemic was hammering the economy. Last week, the central lender announced a second rate cut, a more typical quarter-point reduction.

Though Trump has vowed to force prices down, in part by encouraging oil and gas drilling, some of his other campaign vows — to impose massive taxes on imports and to deport millions of immigrants working illegally in the United States — are seen as inflationary by mainstream economists. Still, Wall Street traders view an 82% likelihood of a third rate cut when the Fed next meets in December, according to the CME FedWatch tool.

The producer worth index released Thursday can propose an early look at where buyer expense boost might be headed. Economists also watch it because some of its components, notably healthcare and budgetary services, flow into the Fed’s preferred expense boost gauge — the personal consumption expenditures, or PCE, index.

Stephen Brown at enterprise apportionment Economics wrote in a commentary that higher wholesale airfares, enterprise apportionment fees and healthcare prices in October would push core PCE prices higher than the Fed would like to view. But he said the boost wouldn’t be enough “to justify a pause (in rate cuts) by the Fed at its next conference in December.″

expense boost began surging in 2021 as the economy accelerated with surprising speed out of the pandemic decline, causing severe shortages of goods and labor. The Fed raised its standard yield rate 11 times in 2022 and 2023 to a 23-year high. The resulting much higher borrowing costs were expected to tip the United States into decline. It didn’t happen. The economy kept growing, and employers kept hiring. And, for the most part, expense boost has kept slowing.