Wholesale prices rose more than anticipated in November, suggesting potential challenges in curbing inflation.
The Bureau of Labor Statistics (BLS) reported on Thursday that the Producer Price Index (PPI), which measures final-demand goods and services prices, increased by 0.4% for the month.
This figure exceeded expectations of 0.2%. On an annual basis, PPI climbed by 3%, marking its highest year-over-year increase since February 2023.
Core PPI, which excludes volatile food and energy prices, met expectations with a 0.2% monthly increase. Excluding trade services, PPI rose by just 0.1%, while the annual core PPI advanced 3.5%.
The rise in wholesale prices was driven largely by a 0.7% monthly increase in final-demand goods prices, the sharpest uptick since February.
Notably, food prices surged by 3.1%, with chicken egg prices skyrocketing 54.6%. Retail egg prices climbed 8.2% in November, up 37.5% year-over-year. Services costs increased by 0.2%, propelled by higher trade expenses.
Meanwhile, the Labour Department revealed a sharp increase in unemployment claims for the week ending December 7. Seasonally adjusted first-time claims reached 242,000, significantly exceeding the 220,000 forecast and marking a rise of 17,000 from the prior week.
Continuing claims also edged up to 1.89 million, with their four-week moving average hitting its highest level in over four years.
Inflation data this week has been mixed. The BLS previously reported that the Consumer Price Index (CPI), a key inflation measure, rose by 0.3% in November and 2.7% year-over-year.
Despite persistent inflationary pressures, markets overwhelmingly expect the Federal Reserve to cut its benchmark interest rate by 0.25% next week. The CME Group’s FedWatch Tool places the probability of a rate cut at 98.7%.
Economists generally viewed the inflation data as moderate, suggesting that disinflationary trends remain intact.
