US producer prices rise in October, jobless claims fall
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The news: US producer prices increased 0.2% in October, driven by higher service costs, including a 3.6% rise in portfolio management fees and a 3.2% jump in airline fares, data from the US Bureau of Labor Statistics showed.
The numbers: The core PPI, which excludes food, energy and trade, climbed 0.3% month-on-month and 3.5% year-on-year. The producer price index for final demand increased 0.2% from a month earlier after rising 0.1% in September.
Meanwhile, data from the Department of Labor showed initial jobless claims dropped by 4,000 to 217,000 for the week ending 9 November, signalling a stable job market despite recent disruptions from storms and strikes.
The number of continuing claims fell to 1.873 million, likely reflecting the end of furloughs related to the Boeing strike and reduced hurricane impact.
The context: The wholesale inflation data came after the more closely monitored consumer price index a day earlier showed core inflation had stayed persistent for the third consecutive month.
After the data PPI release, economists adjusted their estimates for the October core PCE inflation – the Federal Reserve preferred inflation measure - to a 0.28%-0.32% range, up from a previous 0.2%-0.26% range.
What they said: “The price data released this week suggest that inflationary pressures are proving stronger than the Fed anticipated,” said Stephen Brown, deputy chief North America economist at Capital Economics.
The sources: US Bureau of Labor Statistics , US Department of Labor , Bloomberg , Reuters
