Traders work on the floor of the New York Stock Exchange in New York City, on Sept. 21, 2022. (Michael M. Santiago/Getty Images) Wholesale inflation rose by 8 percent in annual terms and 0.2 percent in monthly terms in October, suggesting inflationary pressures for consumers are far from dissipated, but stocks rallied on the opening bell as investors thought the price data would be worse.
Investors expected that inflation from the perspective of business input costs, as measured by the Producer Price Index ( PPI ), would rise 8.3 percent in the 12 months through October , and by 0.5 percent month over month .
But data released on Nov. 15 by the Bureau of Labor Statistics (BLS) came in slightly cooler, at 8 percent year over year and 0.2 percent month over month, sending Wall Street’s main indexes higher as the lower-than-expected numbers bolstered bets that the Federal Reserve would slow its pace of rate hikes.
At the opening bell, the Dow Jones Industrial Average rose 219.2 points, or 0.65 percent, to 33,755.94. The S&P 500 Index rose 49.2 points, or 1.24 percent, to 4006.41, while the Nasdaq Composite rose 278.6 points, or 2.49 percent, to 11,474.82 after the markets opened.
Producer prices tend to be a leading indicator of consumer price inflation as some portion of business input costs get passed along to consumers. Peak Inflation?
The lower-than-expected wholesale price acceleration data prompted a number of analysts to suggest inflation is slowing.
“Oct. PPI came in way below expected. That’s the second data point in a row to suggest inflation has cooled,” Gary Black, managing partner at The Future Fund LLC, said in a post on Twitter .
The other data point Black was referring to was the recently released Consumer Price Index (CPI), which showed prices rising at 7.7 percent in the […]
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