Wholesale prices came in below forecasts for October, yet inflation pressures remain

What the report actually showed

The Bureau of Labor Statistics said wholesale prices rose 0.3% in October, less than the 0.4% economists expected. This gauge tracks what U.S. producers receive before goods and services reach customers.

Core PPI, which removes food and energy, also rose 0.3% and matched the consensus. Year over year, headline PPI increased 6.5%, a 0.2 percentage point pickup to the fastest pace since November 2022.

Looking deeper, PPI that strips out food, energy and trade services rose 0.5% in October. Prices for goods were up 0.5%, with over 60% of the gain coming from items outside food and energy, even as that particular subset dipped 0.1% for the month.

Over the past 12 months, the goods index surged 10.2%, marking the largest increase since October 2022. Prices for final-demand services rose 0.2%, led largely by transportation and warehousing, with truck freight up 3.9%.

Other parts of the report posted multi year highs. Prices for intermediate processed goods were up 14.6% from October 2025, the largest advance since July 2022, while intermediate services rose 6.9%, the most since November 2022.

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Markets, the Fed calendar, and what officials said

This PPI print landed a few weeks before the Federal Reserve's Dec. 8-9 meeting. Markets are leaning toward a 0.25 percentage point increase in the policy rate, with a small probability that the Federal Open Market Committee goes 0.5. Equity futures pushed higher following the release, as Treasury yields showed a mixed move.

Earlier in the week, the BLS reported that consumer inflation ran hotter than expected: headline CPI rose 0.4% in October and core increased 0.3%, both 0.1 percentage point above forecasts. Because of the October 2025 government shutdown, the agency did not release the 12-month CPI figure. The data suggest the Fed is still some distance from its 2% inflation objective.

"Today's PPI data - which shows some signs of improving, albeit still too-high - is unlikely to change the Fed's approach in December because the CPI data was already outside their comfort zone," said Chris Zaccarelli, who is Northlight Asset Management's chief investment officer.

"We've had some signs of trouble now for several months in a row," Chicago Fed President Austan Goolsbee said during a CNBC interview Friday. "If you look at how broad-based the inflation is, it's not just that we're above the target and have been for some time. It's that in categories that are not driven by oil prices and not driven by tariffs, you're still seeing stalled progress and in some cases going the wrong way." He added, "We've been above 2% for almost six years, and while it sometimes we were making progress, lately we're not making any progress, and if anything, it's going the wrong way," and "Inflation is rising; it's it's proved far more persistent than we predicted at the beginning from the supply shocks."

Why this matters for your portfolio

Policymakers are increasingly focused on inflation pressures linked to the Iran war, higher fuel costs and President Donald Trump's tariffs, which are showing up across more parts of the economy. The Fed would typically treat those kinds of shocks as temporary, but the breadth of price increases raises the risk of more persistent inflation.

In plain English: stickier inflation plus firmer producer costs keeps the door open to another rate hike in December, with a nonzero chance of a bigger move. That path would influence borrowing costs, yield curves and equity valuations, so tracking how CPI and PPI evolve from here remains central to positioning.

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