U.S. producer price growth slows, showing moderating inflation

U.S. producer price growth stepped down in October by more than expected in the latest sign that inflationary pressures are beginning to ease.

The producer price index for final demand advanced 8% from a year ago, the smallest annual gain in more than a year, and 0.2% from month earlier, Labor Department data showed Tuesday.

The median estimates in a Bloomberg survey of economists called for a 8.3% annual increase and a 0.4% rise from the prior month.

The S&P 500 opened higher and Treasury yields eased, while the Bloomberg dollar index declined after the report.

Excluding the volatile food and energy components, the so-called core PPI was unchanged in October and rose 6.7% on an annual basis.

The data come on the heels of a smaller-than-expected monthly increase in the October consumer price index, which investors and Wall Street welcomed as a sign that the fastest price increases in decades are finally be starting to ebb.

After peaking in March at 11.7% on an annual basis, producer price growth has moderated amid improving supply chains, softer demand and a weakening in many commodities prices.

Excluding food and energy, costs of goods declined during the month, and services prices fell for the first time since 2020.