US wholesale prices rose to a four-year high on an annual basis in October, though the monthly increase came in smaller than expected, the Bureau of Labor Statistics reported Friday. The producer price index, which tracks the prices domestic producers receive for goods before they reach consumers, climbed 0.3% for the month on a seasonally adjusted basis, below the Dow Jones consensus forecast of 0.4%. On an annual basis, headline PPI accelerated to 6.5%, up 0.2 percentage point and marking the highest annual rate since November 2022. Core PPI, which strips out food and energy, posted a 0.3% gain for the month, meeting expectations.
The report arrives ahead of the Federal Reserve's next policy meeting on December 8 and 9, with markets fully pricing in a quarter percentage point interest rate increase. Chicago Fed President Austan Goolsbee warned in a CNBC interview Friday that inflation pressures remain broad-based across the economy. "We've had some signs of trouble now for several months in a row," he said. "If you look at how broad-based the inflation is, it's not just that we're above the target and have been for some time. It's that in categories that are not driven by oil prices and not driven by tariffs, you're still seeing stalled progress and in some cases going the wrong way."
Several categories showed significant annual increases. Goods prices jumped 10.2% from October 2025, the biggest 12-month surge since October 2022, driven largely by non-food and non-energy goods. Prices for intermediate processed goods soared 14.6% from a year earlier, the largest annual gain since July 2022. Intermediate prices for services posted a 6.9% increase, the largest since November 2022. Final demand services prices increased 0.2% for the month, mostly linked to transportation and warehousing services, which saw truck transportation of freight rise 3.9%.
Policymakers are increasingly concerned that inflation generated by the Iran war, higher fuel prices and President Donald Trump's tariffs are spreading through the economy. Chris Zaccarelli, chief investment officer for Northlight Asset Management, said the data "is unlikely to change the Fed's approach in December because the CPI data was already outside their comfort zone." Goolsbee noted that inflation has remained above the Federal Reserve's 2% target for nearly six years. "While sometimes we were making progress, lately we're not making any progress, and if anything, it's going the wrong way," he said.
The wholesale price report followed data earlier in the week showing consumer price inflation was hotter than expected. The headline consumer price index saw a 0.4% increase in October while core was up 0.3%, both 0.1 percentage point higher than expected. The Federal Reserve remains a significant distance from its 2% inflation goal.