U.S. producer prices rose again in October, recording their largest annual increase in four years and adding to concerns that inflation could remain elevated. The Producer Price Index for final demand increased 0.3% from September, following an upwardly revised 1.4% jump the previous month, according to data released Friday by the Labor Department's Bureau of Labor Statistics. Economists surveyed by Reuters had expected a 0.4% increase.

Producer prices climbed 6.5% over the 12 months ending in October, the largest year-over-year gain since November 2022. That followed a 6.3% annual increase in September.

Higher goods prices accounted for much of October's monthly increase, rising 0.5%, largely because of higher costs for food and basic organic chemicals. Services prices advanced 0.2%, marking their fifth consecutive monthly increase.

The report followed stronger-than-expected consumer inflation data for October and signs of continued strength in the labor market. Nonfarm payrolls increased sharply last month, while the unemployment rate declined to 4.1% from 4.2% in September, according to government figures released last week.

The combination of persistent price pressures and solid employment has complicated the Federal Reserve's decisions on interest rates. Financial markets have been divided over whether the central bank will raise its benchmark rate by 25 basis points in December or consider a larger increase of half a percentage point. Comments from Federal Reserve Governor Christopher Waller have also contributed to uncertainty over the next move.

The Fed maintained its benchmark overnight interest rate in a range of 3.75% to 4.00% at its meeting last month. Markets were also anticipating another increase in January, according to CME Group's FedWatch tool.