U.S. Producer Prices Increase While Unemployment Claims Decline

The October economic data released in the U.S. includes changes in the Producer Price Index (PPI) and unemployment claims.

Producer Price Index Rises In October, the PPI in the U.S. increased by 2.4% year-over-year. This rise was slightly above the economists' expectations of 2.3% and showed a trend of acceleration compared to the previous period's increase of 1.8%. On a monthly basis, the PPI rose by 0.2%, aligning with expectations.

Excluding food and energy, the annual PPI increase in October was recorded at 3.1%. This rate exceeded the expectation of 3% and showed acceleration over the previous period's increase of 2.8%. On a monthly basis, the PPI, excluding food and energy, increased by 0.3%, also in line with expectations.

Unemployment Claims and Labor Market Looking at the U.S. unemployment claims data, a positive picture is emerging. Unemployment claims in October stood at 217,000, falling short of expectations. The previous period's figure was revised to 221,000. Ongoing unemployment claims decreased to 1.873 million, showing a drop below the previous period's 1.892 million. Additionally, the four-week average for unemployment claims was reported at 221,000, down from the previous 227,250.

In light of these data, it is observed that producer prices are on an upward trend in the U.S. economy, while a positive trajectory is seen in the labor market. The increase in PPI indicates that inflationary pressures are being felt, whereas the decrease in unemployment claims suggests that the labor market is partially recovering. Economists point out that these trends could have significant effects on economic policies.

DXY Continues to Rise Ahead of Powell's Speech The dollar continues to rise against six major currencies. As markets await Fed Chairman Jerome Powell's speech, the DXY has climbed to 107, its highest level since November 2022. Despite a slight pullback to 106.7 ahead of the PPI data in today's volatility, the index maintains a positive outlook post-release.

The dollar is also being supported recently by investor optimism regarding Trump's economic plans, which may include higher tariffs and tighter immigration policies that could raise inflation and slow down the Fed's interest rate reduction process. The expectation of an increase in budget deficit spending is among the factors raising Treasury bond yields and supporting the dollar.

Moreover, with both chambers of Congress shifting to Republican control starting January, Trump is positioned to effectively advance his policies.