Services push US factory gate inflation higher in October
Dearer services prices pushed factory gate inflation past economists' forecasts last month.
Total producer prices rose by 0.4% month, according to the Bureau of Labor Statistics, pushing the year-on-year rate of gains from 2.6% to 2.8%.
Economists had expected headline producer prices to go the other way and to show a 2.5% rate of gains.
Goods prices advanced by 0.3% on the month following a jump of 0.7% in September while those for services were up by 0.5% after rising 0.4% during the prior month.
October's rise in goods prices came as a 0.5% jump in the cost of food in comparison to September more than offset flat energy prices.
At the 'core' level, final demand prices excluding food, energy and trade picked-up from a 2.1% rate of gains in the month before to 2.3%.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "[...] Core services PPI is trending up even when the trade services component is stripped out, with the y/y rate nudging up to a six-year high of 2.3% in October; at the turn of the year, the rate was just 1.5%.
"Nearly half the rise in core goods prices was due to a 2.1% jump in the pharma component, but even allowing for this, the trend in core PPI goods inflation is rising. The PPI does not drive the Fed, but policymakers will note the threat to consumer price inflation if PPI inflation continues to rise, as we think likely."