WASHINGTON—A gauge of U.S. business prices rose in October at the fastest pace in nearly six years, suggesting inflation could be picking up steam after a summer slowdown.
The producer-price index, a measure of the prices businesses receive for their goods and services, rose a seasonally adjusted 0.6% in October from a month earlier, the Labor Department said Friday. This was the biggest monthly increase since September 2012.
When excluding the often-volatile food and energy categories, prices were up 0.5% in October from the prior month. Excluding food, energy and a volatile gauge of margins called trade services, prices grew 0.2%% last month.
Economists had expected a 0.3% one-month increase in overall prices, a 0.2% increase for prices excluding food and energy and a 0.2% rise for prices excluding food, energy and trade services.
From a year earlier, the overall producer-price index increased 2.9% in October, while prices excluding food and energy grew 2.6% and prices excluding food, energy and trade services rose 2.8%.
Last month’s headline price growth was driven by gains in prices for services, which grew 0.7%, the largest one-month increase since the beginning of 2016.
In the longer term, annual gains in the headline index have risen since the beginning of 2016, while the two core measures have also drifted higher.
The producer-prices measure usually follows the same trends as other broad inflation gauges, though it doesn’t always translate into what consumers pay. The personal-consumption-expenditures price index, a broad inflation gauge closely watched by the Federal Reserve, pointed to tame inflation over several months through September.
So-called PCE prices rose 0.1% in September from August, the fourth straight month in which the gauge fell short of the 0.165% monthly pace needed to meet the Fed’s 2% annual target.