October PPI Rises 0.3%, Core Stays Hot at 0.5%

The Producer Price Index for final demand rose 0.3 percent in October, a touch below the 0.4 percent gain economists had penciled in and a sharp step down from September. But beneath the headline, the core barely cooled. Prices for final demand excluding foods, energy and trade services rose 0.5 percent in October, a step down from September's 0.7 percent yet still well above the 0.3 percent core consensus, and the 12-month advance in final demand reached its highest level since late 2022. This is the classic profile that worries rate markets: a relief headline masking a sticky, broad-based inflation that has not broken.

Key Takeaways Final demand PPI rose 0.3% month over month in October, be…