It might not be much of a rise but inflation clearly picked up for the month of October at the producer level. It rose a strong .4% matching last month’s when expectations were for a much smaller number of .1%. Stripping out food and energy it still rose .2%. These numbers pushed inflation to 2.8% for the last 12 months and for core up 2.3% at the producer level.
At the retail level, reported this morning and is supposedly the inflation the consumer sees, the number rose a more modest .1% but core inflation matched the PPI at .2%. For the year it is up 2% down a bit from September, but the closely followed core rate rose to 1.8% from 1.7%.
The gains were widespread, and not due to a spike in any one item, but there was a push up from housing and other structures while oil pulled inflation down for October.
This report should give the FED comfort in increasing rates in December as the core rate for the last three months has risen to a 2.4% annualized rate and their target is 2%. The trend is up and rising interest rates tend to slow inflation, so they could easily justify a rate increase.
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