Wholesale prices rose more than expected in November, adding to a string of sticky inflation prints.
Thursday’s report from the Bureau of Labor Statistics showed that its producer price index (PPI) — which tracks the price changes companies see — rose 3% from the year prior, up from the 2.4% in October and above the 2.6% increase economists had projected. This marked the highest year-over-year increase since February 2023. On a monthly basis, prices increased 0.4%, compared to the 0.2% seen in October.
Excluding food and energy, “core” prices increased 3.4% year-over-year, above October’s 3.1% increase. Economists had expected an increase of 3.2%. Meanwhile, month-over-month core prices increased 0.2%, in line with last month’s rise and economist projections.
“PPI isn’t so scary once you get past the headline,” Nationwide financial markets economist Oren Klachkin said of this morning’s November Producer Price Index report. “While the underlying data quell fears of a new inflation surge, they don’t suggest a quick fall to 2% either. Producer prices, and the broader inflation complex, are on an extended and bumpy journey to the Fed’s goal.”
Thursday’s PPI reading comes one day after the release of the November Consumer Price Index showed core inflation rose 3.3% for the fourth straight month. The consumer price reading was largely in line with expectations, though, and did little to shake investor confidence that the Federal Reserve will cut interest rates at its meeting next week.
The sticky nature of the CPI print “is a little disconcerting,” Paul Ashworth, chief North America economist at Capital Economics, wrote on Wednesday. “But we don’t expect it to persuade the Fed to skip another 25bp rate cut at next week’s FOMC meeting.”
Still, a combination of recent months of data has shown that inflation isn’t quickly falling toward the Fed’s 2% target. That has prompted investors to anticipate fewer Fed rate cuts in 2025 than initially hoped.
“The Federal Reserve can feel largely pleased with the progress made on lowering high levels of inflation over the last couple years,” BlackRock global CIO of fixed income Rick Rieder wrote in a note on Wednesday. “But the bulk of this progress is behind us now and inflation may remain stubbornly sticky near current levels for a time.”
Read more: What the Fed rate cut means for bank accounts, CDs, loans, and credit cards
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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