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According to the Labor Department, wholesale inflation dropped 0.5% in October, the biggest drop in the producer price index since April 2020.

Key Details: Wall Street had been expecting a 0.1% increase in wholesale prices. Those prices, measured by the producer price index, serve as an indicator of the prices that consumers ultimately pay.

Key Quote: “The Fed will welcome the reprieve, after producer prices recorded a 4.9% annualized gain in [the third quarter], and coupled with yesterday’s CPI report, it bolsters the case for no further rate increases,” wrote Matthew Martin, US economist for Oxford Economics.

For Context: On Tuesday, the Labor Department said that the Consumer Price Index (CPI) was unchanged in October. Wall Street rallied, believing that the Federal Reserve would not raise interest rates this year and might cut rates in the first six months of 2024.

How the Media Covered it: Some left-rated sources noted that the drop in the producer price index was a positive development for the Federal Reserve, which has been working to rein in high inflation. Some right-rated outlets noted that many economists believe that the Federal Reserve is done raising interest rates, given the recent decline in inflation.