Oct. Wholesale Inflation Trumps Projections in U.S.

Wholesale inflation south of the border came in ahead of expectations last month, according to figures released Tuesday, driven by a surge in the cost of services, leading to the biggest annual increase in wholesale inflation in over five and a half years.

Tuesday's report from the U.S. Labor Department also showed steady gains in underlying producer prices, which support expectations of a gradual increase in inflation and keep the Federal Reserve on track to raise interest rates in December.

The department's producer price index for final demand increased 0.4% last month after a similar gain in September. In the 12 months through October, the PPI jumped 2.8%, the largest increase since February 2012.

The PPI rose 2.6% year-on-year in September. Economists had forecast the PPI edging up but 0.1% last month and increasing 2.4% from a year ago.

Prices for services advanced 0.5% last month after increasing 0.4% n September. A 24.9% surge in margins for fuels and lubricants retailing accounted for almost half of the increase in the cost of services last month.

That gain helped to offset a 4.6% drop in the cost of gasoline. Wholesale gasoline prices soared 10.9% in September in the aftermath of Hurricane Harvey, which struck Texas in late August and reduced refining capacity in the Gulf Coast area.