PPI report, October 2026 results: producer prices rise 0.3%, below forecast, but the annual rate climbs to 6.5% and a December hike holds above 90%
This is the follow-up to our PPI preview, written before the 8:30 a.m. ET release. The headline came in slightly cooler than expected, but the details show price pressure moving away from energy and into the rest of the index, which is why the softer headline did little to change expectations for the Fed's December meeting.
What happened
The Bureau of Labor Statistics published the October producer price index at 13:30 UTC on Friday, November 13. The figures below are as reported by ActionForex and Seeking Alpha.
| Final demand PPI | October | Consensus | September |
|---|---|---|---|
| Headline, month on month | +0.3% | +0.4% | +1.4% (revised from +1.3%) |
| Headline, year on year | 6.5% | 6.6% | 6.3% |
| Ex food and energy, month on month / year on year | +0.3% / 5.0% | +0.3% | +0.7% |
| Ex food, energy and trade, month on month / year on year | +0.5% / 4.9% | n/a | +0.5% |
The composition changed sharply from September. Energy prices for final demand fell 0.1% after a 10.0% jump the month before, and diesel dropped 7.9%. Goods overall rose 0.5% after 2.5%, but goods excluding food and energy accelerated to 0.5% from 0.3%, and food rose 1.3%. Services rose 0.2% after 1.0%, held down by a 0.2% fall in trade services, which measure retail and wholesale margins. Transportation and warehousing rose 2.0%, with truck freight up 3.9%. Further up the pipeline, processed intermediate goods are up 14.6% from a year earlier, according to ActionForex.
What the market is pricing
Prices are from BetG8's live Fed rate decision odds page, which reads Kalshi and Polymarket every five minutes. The before column is the reading in our preview at 10:58 UTC; the after column is 16:58 UTC, three and a half hours after the release.
| Fed decision | Polymarket before / after | Kalshi before / after |
|---|---|---|
| December 9: 25 bp hike | 88.5% / 91.5% | 88.5% / 91.5% |
| December 9: hike of 50 bp or more | 9.2% / 4.7% | 10.5% / 4.5% |
| December 9: no change | 2.6% / 2.8% | 3.5% / 3.5% |
| January 2027: 25 bp hike | 59.5% / 57.5% | 58.5% / 58.5% |
| January 2027: no change | 39.0% / 40.5% | 36.5% / 39.5% |
The clearest move is in the size of the December hike rather than its likelihood. The chance of a half-point or larger increase roughly halved on both venues, from about 10% to under 5%, and that probability moved into the quarter-point contract. In other words, the softer headline took some of the tail risk out of December without making a pause any more likely. January barely moved: Polymarket is two points lower than before the release, Kalshi is unchanged, and both still lean towards a second hike.
Why it matters
Producer prices feed into several components of the personal consumption expenditures index, the inflation gauge the Fed targets, so the PPI matters more for the Fed than its headline profile suggests. The October report is also the last major inflation release before the December 9 decision. It follows a hotter than expected consumer price report, covered in our October CPI report, and a week in which several Fed officials, including New York Fed President John Williams, backed further tightening, as covered in our report on Williams.
The split inside the report explains the market reaction. A monthly headline below forecast is welcome, but it came from energy, the most volatile part of the index. The measure that strips out food, energy and trade services rose 0.5% for a second month, and goods outside food and energy sped up. Not everyone expects the Fed to go further than a quarter point: Seeking Alpha cites LPL Financial's chief economist as saying a 50 basis point move could pose unnecessary risks given the economy's fragility. Markets agree for now, with a larger December hike priced below 5%.
What to watch next
First, Fed officials' comments in the run-up to the pre-meeting quiet period, which will show whether the committee reads the report as reassuring or as broadening inflation. Second, the January contract, which is still split at around 58% for a hike; our Federal Reserve topic page collects the related Polymarket markets and the inflation and CPI page tracks the monthly print markets. Third, the bond market: the 10-year Treasury yield was around 5.13% on Friday, according to Investing.com, and rate-sensitive sectors such as chipmakers, covered in our report on the chip stock sell-off, remain under pressure.
Method and limits
PPI figures are as reported by ActionForex and Seeking Alpha from the Bureau of Labor Statistics release; the two outlets report two different core measures, which are shown separately. Kalshi and Polymarket prices are from BetG8's live page and will keep moving; the page shows current values. Nothing here is a forecast by BetG8 or investment advice.
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Frequently asked questions
What was the PPI for October 2026?
Final demand producer prices rose 0.3% in October 2026, below the 0.4% consensus, after a revised 1.4% rise in September. The annual rate rose to 6.5% from 6.3%, the highest since November 2022.
Did the PPI change the odds of a Fed hike in December?
Slightly. A quarter-point hike on December 9 rose to 91.5% on both Kalshi and Polymarket at 16:58 UTC from 88.5% before the release, while a hike of 50 basis points or more fell to 4.7% on Polymarket and 4.5% on Kalshi from about 9% to 10%. These are market prices, not predictions.
What is core PPI for October 2026?
Producer prices excluding food and energy rose 0.3% in October and 5.0% from a year earlier, according to Seeking Alpha. The narrower measure excluding food, energy and trade services rose 0.5% for a second month and 4.9% from a year earlier, according to ActionForex.
Sources
- ActionForex, US PPI slows sharply to 0.3% but underlying price pressures stay firm
- Seeking Alpha, PPI inflation rises less than expected in October
- Reuters via Investing.com, Wall St gives up early gains as tech stocks slide
- Kalshi and Polymarket, Fed decision markets, read 16:58 UTC via BetG8's live page
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