US wholesale inflation hits 6.5%, fastest since 2022, with trucking up 25%

US wholesale inflation ran at 6.5% year on year in October, its fastest pace since 2022, and truck freight prices did most of the running — up nearly 25% annually. That's not a rounding error in a shipper's budget. That's a repricing of the supply chain itself.

The Bureau of Labor Statistics reported Friday that the producer price index rose 0.3% from September. Transportation and warehousing costs climbed 2% on the month, following an even larger jump in September. Truck transportation of freight posted its biggest monthly increase since April.

Core wholesale prices — stripping out food and energy — rose 5% from a year earlier. Core goods costs climbed by the most since May. For context, that 5% reading outpaces consumer core inflation, which sat around 2.8%. Businesses almost certainly pass some of that gap along. Consumers get the invoice eventually.

What does this change for shippers?

Freight is no longer the deflationary line item it was through much of the freight recession. Heather Long, an economist commenting on the figures, noted: "Businesses are almost certainly going to pass some of those higher costs onto consumers. And no, it's not all diesel/gas." Energy prices actually eased 0.1% in October after the prior month's surge. The cost pressure is now coming from capacity, warehousing and demand — not just fuel.

Carl Weinberg, chief economist at High Frequency Economics, put the mechanism plainly: "Transportation costs are the channel through which energy prices bleed through into core goods prices." For shippers, that means contract rate negotiations heading into 2027 start from a materially higher floor than a year ago. For carriers, it's the first sustained pricing power in years.

The Fed's next move

Markets widely expect the Federal Reserve to raise interest rates by a quarter percentage point when its two-day meeting concludes December 9. Some Fed officials have already signaled they may need to be more aggressive to bring inflation down. Weinberg warned that firm underlying increases and rising transportation costs "will keep inflation risks front and center."

A rate hike raises the cost of financing inventory and equipment alike. Fleets eyeing truck purchases and shippers carrying higher-cost stock both feel it.

Where the pressure sits

The October detail tells a broader story than trucking alone:

• Wholesale food prices rose 1.3% month on month, the most since February, driven by the Middle East conflict, the Russia-Ukraine war and tariffs.
• Prices of electronic components and accessories rose by the most since April, with data center construction costs also climbing — a fresh inflation channel policymakers are watching.
• Processed goods for intermediate demand, excluding food and energy, rose by the most since May.
• Plastic resins and materials, an input across a vast range of consumer goods, posted their biggest increase in five months.
• Computer equipment prices were little changed.

Services costs moderated, with trade services prices declining. A less-volatile PPI measure excluding food, energy and trade services rose 0.5% monthly and 4.9% annually.

Watch the PCE print

Several PPI components feed the Fed's preferred inflation gauge, the personal consumption expenditures price index. The October picture there was mixed: airfares, hospital outpatient care and physician care rose; nursing home care and legal services fell. The Bureau of Economic Analysis releases October PCE data, with income and spending figures, on November 25.

That print, and the December 9 Fed decision, will frame whether freight's 25% run becomes the new baseline or the peak. On this evidence, shippers should budget for the former.