PPI Report Shows Producer Prices Rose Only 0.3%, Less Than Expected, and 6.5% Over a Year

Show the data

Category	Value
Jan	0.6%
Feb	0.5%
Mar	0.8%
Apr	1.1%
May	0.5%
Jun	-0.1%
Jul	0.1%
Aug	0.4%
Sep	1.4%
Oct	0.3%

Sec.01What the PPI report showed for October

BLS's final demand index, the headline PPI, rose 0.3% in October after seasonal adjustment, which strips out the usual swings of the calendar, the BLS release shows. That compares with 1.4% in September, revised from 1.3%, and with the 0.4% in the consensus compiled by Dow Jones.

Before seasonal adjustment, final demand prices were 6.5% higher than a year earlier, the largest 12-month rise since November 2022, BLS said. The consensus compiled by Dow Jones had 6.6%.

BLS's summary splits the month into goods and services: "Leading the October advance in final demand prices, the index for final demand goods increased 0.5 percent. Prices for final demand services moved up 0.2 percent." It then names what moved goods prices most: "Over 60 percent of the advance in October is attributable to prices for final demand goods less foods and energy, which moved up 0.5 percent."

Energy drove the month before, not this one. Producer energy prices edged down 0.1% in October, BLS said. In September, BLS initially reported that they jumped 10.8% and made up over 80% of the rise in goods prices, as StockTitan's September PPI report covered.

Tuesday's CPI, by contrast, came in above forecasts. Consumer prices rose 0.4% in October and core consumer prices 0.3%, the BLS CPI release shows. The Dow Jones survey that StockTitan's CPI report cited had expected 0.3% and 0.2%.

The yearly figure adds the newest month and drops the same month a year earlier. Before seasonal adjustment, prices rose about 0.4% this October, against only about 0.2% in October 2025. That is how the yearly rate climbed to 6.5% from 6.3%, as the preview of the report explained it could.

Sec.02What core PPI showed

BLS publishes two core measures. The one most forecasts cover, final demand less foods and energy, appears in Table 1 of the release. It rose 0.3% after 0.8% in September, and it was up 5.0% from a year earlier.

BLS's own summary leads with a narrower measure that also leaves out trade services, the markup stores and wholesalers earn on goods. It rose 0.5% in October, the same as in September. That beat the 0.3% median forecast of the six economists the Dow Jones survey asked about this measure. Over 12 months, it was up 4.9%. So the core measure most forecasts cover matched expectations, while the narrower one BLS puts first ran hotter.

BLS counts that markup, the gap between what a store pays for goods and what it charges, as a price. It swings a lot. This year it has ranged from a 2.7% drop in May to a 2.1% rise in September, Table A of the release shows, so the two core measures can tell different stories in the same month.

Sec.03How the PPI report feeds the Fed's December decision

The Fed judges inflation by the yearly change in the price index for personal consumption expenditures, or PCE, its monetary policy page says. The Bureau of Economic Analysis builds most PCE prices from BLS consumer and producer price indexes, it explains. So parts of the PPI feed straight into the PCE figures.

BEA's handbook chapter on consumer spending, updated in December 2024, names some of those inputs: PPIs for doctors' offices, for hospitals and for domestic airline travel. BLS's release does not publish those exact indexes, but its Table 2 has the closest ones. Among them, airline passenger services prices were 15.0% higher than a year earlier, while the three health care indexes each rose less than 3%, as the table below shows.

The list changed this year. Portfolio management prices rose 18.5% over 12 months, the fastest in the table, but that PPI no longer feeds PCE directly. In its September 2026 annual update, BEA said that index and the revenue data it was paired with had "driven uncorroborated volatility" in its estimates, so it now measures the amount of those services from BLS data on employment and hours. BEA now also uses PPIs for legal services, where it used a consumer price index before.

After Tuesday's CPI, Fed Vice Chair for Supervision Michelle Bowman said core PCE inflation likely moved up to 3.3% over the 12 months to October, in a speech that day. She also said she would keep watching how financial conditions affect the outlook, and noted that rate-sensitive parts of the economy, such as home building, have declined.

Economists estimated core PCE rose 0.4% in October alone, Reuters reported on November 10, and said Friday's producer price data could change those estimates.

Fed Governor Christopher Waller said he leans toward a quarter point hike in December, and that a half point hike should be considered if core CPI came in around 0.3% or higher, in a speech hours before Tuesday's report. Core CPI rose 0.3% in that BLS report. His condition was about core CPI, and his speech set none for producer prices.

The Fed held its target range at 3.75% to 4% on October 28, with two officials voting for a hike, as StockTitan reported. Friday's report is the last CPI or PPI report before its next decision on December 9. October's PCE figures come first, on November 25.

Sec.04Producer price index vs consumer price index this year

The comparison starts in December because the CPI has no yearly rate for October: BLS could not collect October 2025 consumer price data during the government shutdown, it says. The gap holds for the producer index BLS builds for sales to households, called final demand for personal consumption, which rose about 5.8% over the same months. It holds without food and energy too, as the chart shows.

Show the data

Category	Value
Producer prices (PPI)	5.7%
PPI for household spending	5.8%
Core PPI	4.3%
Consumer prices (CPI)	3.5%
Core CPI	2.4%

That does not mean store prices have to catch up. People sometimes assume the PPI will "anticipate or parallel" the CPI, BLS writes, and then it explains why the two often part ways.

Housing is one big difference. Owners' equivalent rent, what homeowners would pay to rent their own homes, makes up about 24% of the CPI, BLS says, and the PPI leaves it out. The CPI also counts imported goods, which the PPI does not. And the PPI counts medical care paid by employers and the government, which the CPI mostly leaves out.

Sec.05Does the producer price index include services?

The PPI tracks the prices US producers get for their goods and services, from gasoline and trucks to hotel rooms, freight and investment advice. In its headline index, called final demand, services carried about two thirds of the weight in December 2025, Table 1 of the release shows.

Show the data

Part	Value	Share
Services	68.3%	68.3%
Goods	29.0%	29.0%
Construction	2.6%	2.6%

In October, services prices rose 0.2%, and freight carried most of that. "Three-fourths of the October rise can be traced to a 2.0-percent increase in prices for final demand transportation and warehousing services," the release says. Truck freight prices alone rose 3.9%, and they made up over 80% of the services increase, BLS says.

That is why the old nickname, wholesale prices, misleads. The index was called the Wholesale Price Index until 1978, and wholesale trade is now less than 8% of what it covers, BLS explains. It counts goods and services sold to households, businesses, government and buyers abroad, but no imports.

Sec.06What the PPI report means for stocks and interest rates

Before Friday's opening bell, SPY, the fund that tracks the S&P 500, traded about 0.4% above its price at Thursday's 4 p.m. bell, at 8:58 a.m. ET, StockTitan real-time Nasdaq data show. Those data record the price, not why it moved. StockTitan's live market coverage follows the session.

Changes in interest rates "tend to affect stock prices by changing the relative attractiveness of equity as an investment," the Fed's policy page says. Changes in the Fed's rate also reach the rates on many loans and credit lines quickly, the same page says.

Longer-term rates, such as bond yields and mortgage rates, depend on what households and businesses expect short-term rates to do, the page explains. So a report that changes those expectations can move them.

Friday's report gives the Fed three readings to weigh before December 9: a headline below forecasts, a core measure in line with them and a narrower core that ran hotter, all after Tuesday's hot CPI.

Sec.07Frequently asked questions