US Wholesale Inflation Hits Four-Year High at 6.5%. Fed Faces Pressure Over December Rate Hike.

Wholesale prices have risen 6.5 percent over the last 12 months, the largest increase since 2022, adding to concerns about persistent inflation ahead of the Federal Reserve's December interest rate decision.

The Producer Price Index (PPI), which tracks prices from the perspective of domestic producers, rose 0.3 percent in October, slowing from 1.4 percent in September and 0.4 percent in August. Economists had expected a 0.4 percent increase.

From October 2025 to October 2026, the PPI increased 6.5 percent, the largest 12-month rise since November 2022, when it reached 7.4 percent. The annual figure was also slightly below economists' expectations of 6.6 percent.

The PPI is considered an early indicator of inflation, as higher production costs are often passed on to consumers. The latest figures could strengthen the case for further inflation-fighting measures by the Federal Reserve.

Prices for goods rose 0.5 percent in October, down from a 2.5 percent increase in September. Food prices climbed 1.3 percent, while energy prices edged down 0.1 percent.

More than 60 percent of the increase in goods prices came from products excluding food and energy, which rose 0.5 percent. Prices for basic organic chemicals increased 3.9 percent, while fresh and dry vegetables, jet fuel and processed young chickens also became more expensive.

Diesel fuel prices, however, fell 7.9 percent during the month, according to the Bureau of Labor Statistics.

Services prices increased 0.2 percent in October, marking their fifth consecutive monthly rise. Transportation and warehousing costs climbed 2 percent, with truck freight transportation prices rising 3.9 percent.

The figures showed that price increases continued across several sectors despite the slower overall monthly PPI reading.

CNBC reported that investors were already pricing in an expected quarter-percentage-point increase at the central bank's next meeting on Dec. 8-9.

Fed Governor Christopher Waller has said he could consider an even larger rate hike at the December meeting, depending on the CPI and PPI figures. A half-point increase was not off the table, CNBC reported, with Waller warning that if the data warranted a larger move, "hiking only 25 basis points would put our credibility at risk, a risk I am not eager to take."

Earlier this week, the Bureau of Labor Statistics released consumer inflation figures that were slightly higher than expected. Consumer prices rose 0.4 percent in October, following a 0.6 percent increase in September.

Energy prices increased 0.7 percent in October, following a 5.2 percent jump in September. Shelter costs rose 0.3 percent and accounted for more than 30 percent of the monthly increase in consumer prices. Food prices also increased 0.5 percent.

The October PPI came in slightly below expectations, while the CPI was slightly higher. However, annual wholesale inflation remains at a four-year high, indicating continued price pressures even as monthly wholesale price growth has slowed.

"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," Chris Zaccarelli, chief investment officer at Northlight Asset Management, told CNBC.