Wholesale Prices Tumble Throughout Supply Chain

A picture of a purple "PPI" short for producer price index, in front of graphs and charts

Wholesale prices in October posted their biggest decline in 3½ years, the Bureau of Labor Statistics reported.

The producer price index (PPI), a measure of the prices that companies get for finished goods in the marketplace, declined 0.5% in October, far more than analysts’ consensus expectations for a 0.1% increase. The Labor Department said the drop was the biggest monthly decline since April 2020.

On a yearly basis, headline PPI posted a 1.3% increase, down from 2.2% in September.

Goods inputs in all four supply-chain stages declined in October.

Stage 4 goods inputs, measuring the products purchased by industries primarily producing output sold to final demand, such as RV manufacturers, fell 0.4% in October, the largest decline since May, after a 0.3% increase in September. Overall, Stage 4 intermediate demand rose 1.9% year-over-year.

Goods inputs for Stage 3 intermediate demand, measuring suppliers to Stage 4 producers such as RV manufacturers, fell 1.7% in October after a 1.2% increase in September. Overall, year-over-year Stage 3 demand fell 4.1%, the eighth consecutive year-over-year decline.

Goods inputs for Stage 2 intermediate demand, measuring suppliers to Stage 3 suppliers, fell 0.5% in October after a 3.4% increase in September. Overall, Stage 2 intermediate demand dropped declined 2.7% year-over-year.

Finally, goods inputs for Stage 1 demand fell 0.7% in October after a 0.3% increase in September. Overall, demand declined 1.5% year-over-year, the seventh consecutive year-over-year decline.

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