U.S. wholesale prices dropped sharply in October, according to the AP.
What’s going on: “The Labor Department reported Wednesday that its producer price index—which measures inflation before it hits consumers—dropped 0.5% in October from September, the first decline since May and biggest since April 2020. On a year-over-year basis, producer prices rose 1.3% from October 2022, down from 2.2% in September and the smallest gain since July.”
- Meanwhile, core consumer prices—which exclude often-volatile food and energy costs—remained the same from September to October and increased 2.4% from a year earlier.
- Wholesale goods prices declined 1.4%, pulled lower by a 15.3% decrease in the cost of gasoline.
Why it’s important: “As borrowing costs have risen, inflation has decelerated sharply. … [Yet] despite higher interest rates, the U.S. economy and job market have remained resilient. The combination of a sturdy economy and decelerating inflation has raised hopes that the Fed can manage a so-called soft landing—raising rates just enough to tame inflation without tipping the economy into recession.”
In related news: Retail sales in October fell 0.1%, less than the 0.3% economists had feared, Yahoo Finance reports.