As if to reinforce what North Americans have known for months, wholesale prices south of the border rose 8.6% from a year ago in October, their highest annual pace in records going back nearly 11 years.
The U.S. Labor Department said Tuesday the producer price index, which serves as a gauge of finial demand prices from goods-producers, rose 0.6% for the month, in line with Dow Jones estimates and an indicator that inflation pressures are continuing to pressure the U.S. economy. The monthly pace was faster than the 0.5% increase in September.
Stripping out food, trade and energy prices, the index increased 0.4% month over month, slightly below the 0.5% estimate but an elevated pace from September’s 0.1% gain. On a year-over-year basis, core producer prices increased 6.2%. The year-over-year records go back to November 2010.
Elevated demands for goods over services again led the inflation story, with the price increases for final demand goods accounting for more than 60% of the index’s increase. Goods prices rose 1.2% compared to just a 0.2% increase for services, while construction prices jumped 6.6%.
One-third of the increase in goods prices came from soaring gasoline, with prices rising 6.7%. Beef and veal prices represented the other side of the ledger, posting a collective decline of 10.3%. The index for light motor trucks, a key driver of inflation this year, moved lower as did residential electric power.
On the services side, more than 80% of the increase in final demand services price increases came from autos and parts, which increased 8.9%.
