Investing.com – U.S. producer price inflation and its core reading increased more than expected in October, surprising forecasts that were looking for factory gate to ease from a month earlier, official data showed on Tuesday.
In a report, the Commerce Department said that producer prices increased 0.4% last month, topping the forecast for a 0.1% gain and matching September’s increase.
Year-over-year, the producer price index (PPI) rose 2.8% in October, compared to expectations for a gain of 2.4% and higher than the 2.6% increase in the preceding month.
The core producer price index, that excludes food and energy, also rose 0.4% in October, beating forecasts for a gain of 0.2% while matching the prior month’s advance.
Core producer prices increased at an annualized rate of 2.4% last month, above forecasts for a 2.3% increase and the gain of 2.2% in September.
Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories. Furthermore, when producers pay more for goods, they are more likely to pass price increases on to the consumer, so PPI could be considered a leading indicator of inflation.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 94.02, compared to 94.01 ahead of the report.
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