Producer Prices Up in November, Exceeding Estimates
U.S. producer prices rose in November on advances in foods and transportation services, while a measure of underlying costs accelerated, offering some potential signs of inflation pressures bubbling up in the economy.
The producer-price index advanced 0.1% from October, cooling from a rise that was the fastest in six years, Labor Department data showed Dec. 12. The annual gain slowed to 2.5% from 2.9%. The Bloomberg survey median estimates called for no change from the prior month and a 2.5% annual increase.
The figures, which measure wholesale and other selling costs at businesses, suggest prices are starting to stabilize. That may ease concern — after other recent measures — that inflation was drifting below the Federal Reserve’s goal just when policymakers thought it was steadying around their 2% target.
Service prices in the PPI were boosted by higher margins at wholesalers and retailers, though much of it came from fuels and lubricants retailing with a 25.9% increase, the most since 2010. Indexes also rose for health and beauty retailers, wireless-phone services and airline passenger services. While the plunge in global oil costs is keeping headline inflation muted, the tariff war with China means producers may face higher materials prices and supply chain disruptions.
Excluding food and energy, the monthly and annual gains in the core PPI both exceeded estimates, with the annual increase picking up from the prior month. Producer costs excluding food, energy, and trade services — a measure preferred by some economists because it strips out additional volatile components — rose 2.8% from a year earlier for a second month.
