In October, industrial producer prices for the home market in France rose by 0.9 percent, driven by energy and mining products (2.4 percent) and a rebound in manufactured goods (0.3 percent). However, annual producer prices continued their downward trajectory, falling 5.7 percent, marking the eleventh consecutive month of decline, though prices remained 21 percent above 2021 levels.

Notably, refined petroleum products experienced a sharp monthly rebound (7.2 percent) after a steep drop in September, influenced by rising oil prices and euro depreciation. Despite this, annual prices were down 20.0 percent, though still 28 percent above 2021 levels. Similarly, mining, quarrying, and energy products rose month-on-month (2.4 percent), led by higher electricity costs, while their annual decline slowed to 16.0 percent.

Contrasting this, electrical, computer, and electronic equipment prices fell 0.3 percent, reflecting weaker demand, while food and beverage prices remained nearly stable at 0.1 percent, with rising raw material costs offset by falling meat prices.

Transport equipment and other industrial goods prices held steady, maintaining levels significantly higher than in 2021. This report puts the French RPI at minus 25 and the RPI-P at minus 15, meaning that economic activity in general is underperforming compared to expectations.

The producer price indices (PPI) measure transaction prices, exclusive of VAT, for goods from industrial activities sold on the French market. Construction is excluded. Changes in the index provide a guide to inflation from the point of view of the product's producer/manufacturer and, in contrast to the consumer price index (CPI), excludes VAT and other deductible taxed associated with turnover.

The PPI measures prices at the producer level before they are passed along to consumers. Since the producer price index measures prices of consumer goods and capital equipment, a portion of the inflation at the producer level gets passed through to the consumer price index (CPI).

Because the index of producer prices measures price changes at an early stage in the economic process, it can serve as an indicator of future inflation trends. The producer price index and its sub-indexes are often used in business contracts for the adjustment of recurring payments. They also are used to deflate other values of economic statistics like the production index. It should be noted that the PPI excludes construction.

The PPI provides a key measure of inflation alongside the consumer price indexes and GDP deflators. The output price indexes measure change in manufacturer' goods prices produced and often are referred to as factory gate prices. Input prices are not limited to just those materials used in the final product, but also include what is required by the company in its normal day-to-day operations.

The PPI is considered a precursor of both consumer price inflation and profits. If the prices paid to manufacturers increase, businesses are faced with either charging higher prices or they taking a cut in profits. The ability to pass along price increases depends on the strength and competitiveness of the marketplace.

The bond market rallies when the PPI decreases or posts only small increases, but bond prices fall when the PPI posts larger-than-expected gains. The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.