Economic Trends
October CPI Decelerates but Still Tops Expectations as Core Inflation Persists
November 10, 2026
Economic Trends
Wholesale Inflation Cooled in October, but Core PPI Topped Expectations
U.S. producer prices rose 0.3% in October, easing sharply from September’s surge, while annual inflation accelerated to 6.5%. Core PPI remained elevated, truck freight costs climbed and wholesale trade margins varied widely by category. See the key figures, distributor-relevant product breakdowns and our analysis here.
U.S. producer prices cooled considerably from September’s surge, but core inflation, freight costs and several industrial product categories continued to post substantial increases.
The Producer Price Index for final demand rose a seasonally adjusted 0.3% in October, according to data released Nov. 13 by the U.S. Bureau of Labor Statistics. That was below the 0.4% consensus estimate among economists surveyed by The Wall Street Journal.
September’s increase was revised upward to 1.4% from the initially reported 1.3%, while August’s gain was revised to 0.4%.
On an unadjusted basis, producer prices increased 6.5% over the 12 months through October, up from 6.3% in September but slightly below economists’ 6.6% forecast. The annual increase was the largest since November 2022.
Core PPI — defined as final demand less foods, energy and trade services — increased 0.5% for the second consecutive month, exceeding the 0.3% market forecast. Core prices rose 4.9% year over year.
Other key metrics from the latest PPI report:
- Final demand goods prices increased 0.5% after September’s revised 2.5% surge. More than 60% of October’s increase came from goods excluding food and energy, which also rose 0.5%.
- Food prices increased 1.3%, while energy prices edged down 0.1%. Final demand goods prices were 10.2% higher than a year earlier, their largest annual increase since October 2022.
- Final demand services prices rose 0.2% for their fifth consecutive monthly gain. Transportation and warehousing prices climbed 2%, accounting for three-fourths of the services increase.
- Truck freight transportation prices increased 3.9% during October and 24.6% year over year.
- Aggregate trade services margins decreased 0.2% during October but remained 5.7% higher than a year earlier. Trade services measure changes in the margins received by wholesalers and retailers rather than the selling prices of the products themselves.
- Wholesale margin movements varied considerably by category. Food and alcohol wholesaling margins rose 4.2%, chemicals and allied products increased 2.1% and machinery and equipment parts and supplies gained 0.2%. Machinery and vehicle wholesaling margins fell 4.2%.
- Prices for industrial chemicals increased 3.1%, including a 3.9% rise for basic organic chemicals. Steel mill products rose 2.7%, fabricated structural metal products increased 1.7% and electronic components and accessories jumped 4.2%.
- Diesel fuel prices fell 7.9%, while softwood lumber declined 3.1% and plastic packaging products decreased 0.1%.
- Among intermediate-demand categories, processed goods prices rose 0.4% and services prices increased 0.6%. Unprocessed goods prices fell 3.1%.
Selected Industrial Distributor-Relevant PPI Categories
Monthly figures are seasonally adjusted. Annual figures are unadjusted.
| Category | October Monthly Change | 12-Month Change |
|---|---|---|
| Final demand goods | +0.5% | +10.2% |
| Final demand energy | -0.1% | +37.0% |
| Goods excluding food and energy | +0.5% | +5.2% |
| Industrial chemicals | +3.1% | +17.1% |
| Plastic packaging products | -0.1% | +6.0% |
| Softwood lumber | -3.1% | +10.6% |
| Paperboard | +0.9% | +7.3% |
| Steel mill products | +2.7% | +32.9% |
| Aluminum mill shapes | +0.7% | +23.3% |
| Copper and brass mill shapes | -0.7% | +23.9% |
| Nonferrous wire and cable | +0.4% | +19.6% |
| Hardware | 0.0% | +3.5% |
| Plumbing fixtures and brass fittings | +0.2% | +6.0% |
| Heating equipment | +0.1% | +3.3% |
| Fabricated structural metal products | +1.7% | +8.1% |
| Bolts, nuts, screws, rivets and washers | +0.2% | -0.4% |
| Fluid power equipment | +0.1% | +3.5% |
| Mechanical power transmission equipment | +0.1% | +5.2% |
| Air conditioning and refrigeration equipment | +0.1% | +4.1% |
| Switchgear, switchboards and industrial controls | +0.3% | +12.7% |
| Electronic components and accessories | +4.2% | +31.7% |
| Truck transportation of freight | +3.9% | +24.6% |
| Final demand trade services margins | -0.2% | +5.7% |
| Machinery and equipment parts and supplies wholesaling margins | +0.2% | +12.4% |
| Machinery and vehicle wholesaling margins | -4.2% | +1.5% |
| Chemicals and allied products wholesaling margins | +2.1% | +11.4% |
| Paper and plastics products wholesaling margins | +0.3% | +4.1% |
| Food and alcohol wholesaling margins | +4.2% | +8.6% |
MDM Analysis
October’s top-line moderation was welcome after September’s exceptional surge, but the report does not indicate that producer inflation has returned to benign levels. Core PPI held at 0.5%, while annual headline inflation reached 6.5%.
For distributors, cost pressure is increasingly uneven. Diesel and lumber declined, but truck freight, industrial chemicals, steel, electronic components and structural metal products posted substantial increases. That divergence favors category-level cost monitoring and targeted price adjustments over broad-based changes. Electrical supplies distributor Border States provides great insight into this with the company’s monthly Commodity Update newsletter.
Trade margins tell a similarly mixed story. Aggregate margins declined, but chemicals, food and machinery-parts wholesaling margins increased. With annual gains remaining particularly high for metals, electrical components and freight, distributors should continue updating landed costs frequently, enforcing freight-recovery policies and scrutinizing replacement costs before adjusting inventory or customer pricing.
