Current:Home > FinanceUS wholesale inflation accelerated in November in sign that some price pressures remain elevated -DollarDynamic
US wholesale inflation accelerated in November in sign that some price pressures remain elevated
View
Date:2025-04-19 06:30:16
WASHINGTON (AP) — Wholesale costs in the United States picked up sharply last month, signaling that price pressures are still evident in the economy even though inflation has tumbled from the peak levels it hit more than two years ago.
The Labor Department reported Thursday that its producer price index — which tracks inflation before it reaches consumers — rose 0.4% last month from October, up from 0.3% the month before. Measured from 12 months earlier, wholesale prices climbed 3% in November, the sharpest year-over-year rise since February 2023.
Excluding volatile food and energy prices, so-called core producer prices rose 0.2% from October and 3.4% from November 2023.
Higher food prices pushed up the November wholesale inflation reading, which came in hotter than economists had expected. Surging prices of fruits, vegetables and eggs drove wholesale food costs up 3.1% from October. They had been unchanged the month before.
The wholesale price report comes a day after the government reported that consumer prices rose 2.7% in Novemberfrom a year earlier, up from an annual gain of 2.6% in October. The increase, fueled by pricier used cars, hotel rooms and groceries, showed that elevated inflation has yet to be fully tamed.
Inflation in consumer prices has plummeted from a four-decade high 9.1% in June 2022. Yet despite having reached relatively low levels, it has so far remained persistently above the Fed’s 2% target.
Despite the modest upticks in inflation last month, the Federal Reserve is poised to cut its benchmark interest rate next week for a third consecutive time. In 2022 and 2023, the Fed raised its key short-term rate 11 times — to a two-decade high — in a drive to reverse an inflationary surge that followed the economy’s unexpectedly strong recovery from the COVID-19 recession. The steady cooling of inflation led the central bank, starting in the fall, to begin reversing that move.
In September, the Fed slashed its benchmark rate, which affects many consumer and business loans, by a sizable half-point. It followed that move with a quarter-point rate cut in November. Those cuts lowered the central bank’s key rate to 4.6%, down from a four-decade high of 5.3%.
The producer price index released Thursday can offer an early look at where consumer inflation might be headed. Economists also watch it because some of its components, notably healthcare and financial services, flow into the Fed’s preferred inflation gauge — the personal consumption expenditures, or PCE, index.
Despite the overall uptick in producer prices, Paul Ashworth of Capital Economics noted in a commentary that the components that feed into the PCE index were “universally weak” in November and make it even more likely that the Fed will cut its benchmark rate next week.
President-elect Donald Trump’s forthcoming agenda has raised concerns about the future path of inflation and whether the Fed will continue to cut rates. Though Trump has vowed to force prices down, in part by encouraging oil and gas drilling, some of his other campaign vows — to impose massive taxes on imports, for example, and to deport millions of immigrants working illegally in the United States — are widely seen as inflationary.
Still, Wall Street traders foresee a 98% likelihood of a third Fed rate cut next week, according to the CME FedWatch tool.
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
veryGood! (15144)
Related
- How to watch new prequel series 'Dexter: Original Sin': Premiere date, cast, streaming
- Off the Grid: Sally breaks down USA TODAY's daily crossword puzzle, Top Dollar
- Elon Musk's xAI says it raised $6 billion to develop artificial intelligence
- Deadliest year in a decade for executions worldwide; U.S. among top 5 countries
- Justice Department, Louisville reach deal after probe prompted by Breonna Taylor killing
- How Blac Chyna and Boyfriend Derrick Milano Celebrated Their First Anniversary
- National Park Service denies ordering removal of American flag at Denali National Park
- Royal Family Quietly Removes Prince Harry’s 2016 Statement Confirming Meghan Markle Romance From Website
- Dick Vitale announces he is cancer free: 'Santa Claus came early'
- Parents of Aurora Masters, 5-year-old killed in swing set accident, want her to be remembered
Ranking
- At site of suspected mass killings, Syrians recall horrors, hope for answers
- Ryan Phillippe gives shout-out to ex-wife Reese Witherspoon in throwback photo: 'We were hot'
- RHOC's Heather Dubrow Teases Shannon Beador, Alexis Bellino, John Janssen Love Triangle Drama
- These are the best small and midsize pickup trucks to buy in 2024
- FACT FOCUS: Inspector general’s Jan. 6 report misrepresented as proof of FBI setup
- Hilarie Burton Shares Rare Glimpse Into Family Life With Jeffrey Dean Morgan for 15-Year Milestone
- 17 money-saving sites to find an EV charging station, Social Security payout and more
- Paris Hilton Reacts to Fan Concerns Over Son Phoenix's Backwards Life Jacket
Recommendation
Federal Spending Freeze Could Have Widespread Impact on Environment, Emergency Management
Texas’ first-ever statewide flood plan estimates 5 million live or work in flood-prone areas
Father and son drown as dad attempted to save him at Lake Anna in Virginia, police say
Mike Tyson said he feels '100%' after receiving medical care for 'ulcer flare-up'
Highlights from Trump’s interview with Time magazine
Boston Celtics now just four wins from passing Los Angeles Lakers for most NBA titles
Linen Clothing Is the Chicest Way To Stay Cool This Summer: What To Buy Right Now
Melinda French Gates to donate $1B over next 2 years in support of women’s rights