Producer prices climb 6.5% from a year ago, biggest since 2022

Energy costs level off while trucking, food and AI-linked prices rise

Wholesale inflation eased on a monthly basis in October but remained elevated, with the Labor Department’s producer price index — which captures inflation before it reaches consumers — rising 0.3% from September to October, down from a 1.4% jump the previous month.

Compared with a year earlier, the index climbed 6.5%, up from 6.3% in September and the biggest increase since November 2022. A year ago, wholesale inflation was just 3.1%.

The report, released Friday, shows prices rising at a pace well above the Federal Reserve’s 2% annual target. On Tuesday, the government reported that the more widely known consumer price index accelerated in October, driven by rising costs across a wide range of goods and services. Many Fed officials suggested in response that they will almost certainly need to raise their key short-term rate further, perhaps more than once, to combat inflationary pressures in the economy.

When the Fed lifts its rate, other longer-term borrowing costs for things like mortgages, auto loans and credit cards also rise.

Core prices, excluding the volatile food and energy categories, also rose 0.3% from September to October, down from 0.7% a month earlier. On a yearly basis, core wholesale prices rose 5%, the same as in September.

Wholesale inflation cooled largely because overall energy prices levelled off. Yet there were signs that high gas prices are spreading into other sectors, and the buildout of artificial intelligence data centers is also pushing up a range of costs.

“Costs for food and transportation climbed sharply as high fuel prices flow into other parts of the economy,” Ben Ayers, senior economist at Nationwide, wrote in a note. “This creates further upward pressure for food and broader goods inflation ahead even as oil prices have cooled over the past few weeks.”

The producer price index provides a signal about where inflation for consumers may be headed. Wholesale diesel prices dropped 7.9% just from September to October. Still, the report showed the impact of more expensive diesel since the Iran war: prices for freight shipped by truck jumped 3.9% last month, while food prices rose 1.3%. Food, like most goods, is mostly shipped by truck.

The price of electronic components soared 4.2% and industrial chemical prices rose 3.1% in the month, a sign of the demand fueled by the AI buildout.

Economists monitor the PPI because some of the data also feeds into the personal consumption expenditures price index, which is closely watched by policymakers at the Fed. The central bank aims to bring inflation, as measured by the PCE index, to 2%. The Fed’s preferred core gauge stood at 3.1% year over year as of Nov. 13, 2026, according to FRED data from the Federal Reserve Bank of St. Louis (https://fred.stlouisfed.org/series/PCEPILFE).

Friday’s release suggests core prices, according to the Fed’s preferred inflation gauge, will rise about 0.3% from September to October when the PCE index is reported later this month, according to economists at Morgan Stanley. On a yearly basis, core inflation will likely increase to 3.2% from 3.1%, they estimate.

An acceleration in core inflation, as measured by the PCE, would intensify concerns at the Fed that more interest rate hikes are needed to combat rising prices.