November Producer Price Growth Accelerates More Than Expected
2024-12-12
Category: economic

Producer prices rose more than Wall Street's expectations last month as wholesale costs of goods climbed amid a jump in the food component, the Bureau of Labor Statistics reported Thursday. 
The US producer price index increased 0.4% month over month on a seasonally adjusted basis in November, above the 0.2% Bloomberg-polled consensus estimate. October's reading was revised up to 0.3%. 
The index for final demand goods advanced to 0.7% in November, the largest increase since February, compared with a 0.1% increase in October. Services prices rose 0.2%, the fourth consecutive reading above zero but a deceleration compared with the three prior readings. 
Within goods, energy costs were up 0.2% last month following a 0.1% increase in October, while food costs jumped to 3.1% after coming in flat in October. The headline index minus food, energy, and trade services rose by 0.1% in November, decelerating from October's 0.3% increase and below the analysts' 0.2% estimate. 
"Goods prices were the driver of the upside surprise, with an unlikely-to-be-sustained rise in food prices pushing the headline index higher," Matthew Martin, senior economist at Oxford Economics, said in remarks emailed to MT Newswires. 
Year over year, producer prices were up 3% in November, outpacing the 2.6% gain analysts were expecting. The final demand energy index fell 6.2% while food prices gained 5.1%. 
While the headline PPI surprised to the upside, the report's details support another 25 basis-point cut by the Federal Reserve next week, Martin said. On Wednesday, the BLS reported that consumer inflation accelerated in line with market estimates last month on both sequential and annual bases. 
"Our tracking estimate for the personal consumption expenditure deflator, which uses the CPI and PPI as source data, indicates that the headline PCE deflator rose by 0.17% and the core PCE deflator increased by 0.16%," he said.