Grocery items are offered for sale at a supermarket on August 09, 2023 in Chicago, Illinois.
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Wholesale prices in October posted their biggest decline in 2½ years, providing another indication that the worst of the inflation surge may have passed.
The producer price index, which measures final-demand costs for businesses, declined 0.5% for the month, against expectations for a 0.1% increase from the Dow Jones consensus, the Labor Department reported Wednesday. The department said that was the biggest monthly decline since April 2020.
Excluding food and energy, core PPI was unchanged, also below the forecast for a 0.3% increase. Excluding food, energy and trade services, the index increased 0.1%.
The report comes a day after the Labor Department said that the consumer price index, which measures prices for goods and services at the consumer level, was unchanged in October from the previous month. That set off an aggressive rally on Wall Street, where sentiment is rising that the Federal Reserve is done raising interest rates and could in fact start cutting in the first half of 2024.
However, consumers in October showed some sensitivity to prices.
The Commerce Department’s advance retail sales report for the month showed a decline of 0.1%, according to a number that is adjusted for seasonal factors but not inflation. Wall Street had been looking for a decline of 0.2%. Excluding autos, sales rose 0.1%, compared to expectations for an unchanged number.
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