Welcome to Extreme Investor Network, where we bring you the latest updates and insights on the economy that you won’t find anywhere else. Today, we’re diving into the recent report from the Bureau of Labor Statistics on wholesale prices in October.
According to the report, wholesale prices saw a slight uptick in October, coming in at a seasonally adjusted 0.2%. This is in line with expectations and aligns with the Federal Reserve’s decision to cut interest rates again in December. The producer price index, which measures what producers get for their products, is currently at 2.4% on a 12-month basis.
What’s interesting to note is that core PPI, which excludes food and energy, rose 0.3% in October, matching expectations. The 12-month rate for core PPI is at 3.1%, slightly above the Fed’s 2% inflation goal. However, the trend shows that price increases are moderating and inflation is being driven by isolated factors.
In terms of market reaction, stock futures were pointing to a mixed open and Treasury yields held higher. Traders are anticipating another quarter percentage point reduction in interest rates at the upcoming Fed meeting in December. The market-implied probability for a December rate cut is currently at 76.1%, indicating a strong likelihood.
In addition to the wholesale price report, the Labor Department also released data on unemployment benefits. Initial filings for unemployment benefits totaled 217,000 for the week ended Nov. 9, slightly lower than the estimate. Continuing claims were also down from the previous week, totaling 1.873 million.
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