U.S. October PPI rose 2.4%, slightly exceeding expectations, signaling mild inflation pressure.

On Thursday evening,5 yuan investment futures app Beijing Time, the U.S. Bureau of Labor Statistics released the October Producer Price Index (PPI), which showed slight upward signs, surpassing market expectations by 0.1 percentage points with a year-over-year increase of 2.4%. This figure is slightly higher than the market's general expectation of 2.3%, while the core PPI grew by 3.1% year-over-year, also exceeding the expected 3.0%. In line with the trends of the Consumer Price Index (CPI) released earlier this week, the rebound in PPI data is mainly due to the significant decline in U.S. inflation at the end of last year, resulting in a boosted year-over-year increase this year due to the low base effect.

The sub-index data further reveals the specific sources of price fluctuations. In October, wholesale food prices decreased by 0.2% month-over-month, offering a glimmer of relief upstream in the supply chain. In contrast, food prices in September had risen by 1% month-over-month, marking the highest monthly increase since February. As for energy prices, they decreased slightly by 0.3% month-over-month in October, marking the third consecutive month of decline, although the rate of decline has narrowed from 1.1% in September and 2.8% in August. Although the slowing trend in energy prices provided some support for the PPI, it did not lead to a significant decrease.

Market analysts point out that the rebound in PPI data might suggest that the manufacturing and service sectors are still facing some cost pressures, with businesses potentially passing on some of these costs to consumers in the future. Coupled with the CPI data released earlier this week, U.S. inflation in October shows a moderate upward trend, which could affect the Federal Reserve's strategy for controlling inflation. The Federal Reserve is currently closely monitoring data in the coming months to determine whether further tightening policies are needed to address potential inflation risks.

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