US Producer Prices Cool in October as Core Inflation Remains Resilient

US producer prices increased 0.3% month-over-month in October, a sharp deceleration from an upwardly revised 1.4% in September and below the 0.4% market forecast, according to the Bureau of Labor Statistics. The September figure was revised up from 1.3%. Even as monthly inflation eased, the annual producer price index climbed from 6.3% to 6.5%, just under the 6.6% consensus but the highest since November 2022. Crucially, the index excluding food, energy, and trade services rose 0.5% month-over-month for a second straight month, pushing its yearly rate to 4.9%. The divergent data indicate that the steep pullback in headline producer inflation has not yet eased underlying price pressures in any meaningful way.

The cooling was visible across both goods and services, though pockets of inflation remained. Final demand goods prices decelerated from 2.5% to 0.5% month-over-month, with energy costs slipping 0.1%. Food prices, by contrast, advanced 1.3%, while goods excluding food and energy rose 0.5%, representing more than 60% of the total goods price increase. Basic organic chemical prices surged 3.9% even as diesel fuel dropped 7.9%. Final demand services inflation eased from 1.0% to 0.2%, marking a fifth consecutive monthly gain. Transportation and warehousing costs climbed 2.0%, driven by a 3.9% increase in truck freight prices, which accounted for more than 80% of the overall rise in final demand services. Declining trade services margins partially offset the gains.

Further down the production chain, price movements were mixed. Processed goods for intermediate demand rose 0.4% month-over-month, while intermediate services prices increased 0.6%. Unprocessed goods prices fell 3.1%, mainly due to lower energy costs, including a 10.3% drop in crude petroleum. Still, annual inflation for processed intermediate goods reached 14.6%, and intermediate services prices rose 6.8% year-over-year, underscoring persistent cost pressures beyond raw energy inputs. Overall, October’s PPI provides some relief after September’s exceptionally strong monthly print, but offers little evidence of broad-based disinflation at the producer level. Firm underlying prices, elevated intermediate costs, and accelerating annual inflation mean businesses continue to grapple with significant pricing pressure despite the softer headline figure.

Data Summary — US October 2026 PPI

Indicator
Oct
Exp.
Sep

PPI Final Demand (mom)
+0.3%
+0.4%
+1.4%

PPI Final Demand (yoy)
+6.5%
+6.6%
+6.3%

Final Demand Goods (mom)
+0.5%

+2.5%

Final Demand Services (mom)
+0.2%

+1.0%

PPI ex-Food, Energy & Trade Services (mom)
+0.5%

+0.5%

PPI ex-Food, Energy & Trade Services (yoy)
+4.9%

September’s headline monthly PPI increase was revised upward from 1.3% to 1.4%.

Selected Components — October

Component
Oct (mom)
Sep (mom)

Final Demand Foods
+1.3%
+1.1%

Final Demand Energy
-0.1%
+10.0%

Goods ex-Food & Energy
+0.5%
+0.3%

Transportation & Warehousing Services
+2.0%
+3.4%

Trade Services
-0.2%
+2.1%

Processed Intermediate Goods
+0.4%
+2.4%

Unprocessed Intermediate Goods
-3.1%
+6.3%

Intermediate Services
+0.6%
+1.0%

Key Takeaways

• US PPI slowed sharply from 1.4% to 0.3% mom, undershooting forecasts, but annual inflation accelerated from 6.3% to 6.5%.
• Underlying producer inflation held at 0.5% mom, while non-energy goods and freight transportation continued recording substantial price increases.
• Lower raw energy costs provided relief, but elevated processed input and intermediate services inflation indicated persistent pressures across production chains.

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