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Major Agenda Fri, Nov 13 ET 8:30 AM pre-market 1 min read
The Producer Price Index, or PPI, measures changes in prices US producers receive for goods and services. It is not household shopping prices or a measure of every business's purchasing costs. October headline PPI is expected to rise 0.4% month on month, versus the previous 1.3%, pointing to slower increases. After consumer inflation exceeded expectations and Fed officials called for further hikes, this tests whether producer-price pressure is easing.[1]
Expected 0.4% Last release 1.3%
If it comes in above expectations If the monthly change is above 0.4%, producer selling prices are cooling less than expected. That would increase concern about persistent inflation and strengthen the case for further Fed hikes, though it would not establish that businesses can pass every increase to households.[1]
If it comes in below expectations If the monthly change is below 0.4%, producer selling-price pressure is milder than expected. That would weaken one argument for further tightening, but it would not erase the consumer-inflation evidence already released.[1]
An upside surprise could pressure property and growth stocks through higher borrowing costs and lower valuations of distant profits. Producers able to raise prices may protect earnings, while buyers unable to pass those costs on face a squeeze. A downside surprise could relieve rate-sensitive stocks but also signal weaker pricing power for producers. Watch the industry breakdown and the Fed's interpretation rather than treating PPI as a direct forecast of the next CPI.[1]