U.S. supplier price increases eased in November from rapid gains in the first half of the year, in a sign that inflationary pressures could be moderating.
The producer-price index, which generally reflects supply conditions in the economy, rose 7.4% in November from a year earlier, the Labor Department said Friday. That was down from October’s revised 8.1% increase and well below the 11.7% rise in March, the fastest pace since PPI records began in 2010.
On a monthly basis, the PPI increased 0.3% in November, the same as the prior two months. That was slightly above the average monthly gain in the two years before the pandemic and well below month-to-month gains in the first six months of 2022.
Services price increases drove the November gain, while goods prices rose slightly, the Labor Department said.
Consumer inflation moderated in October after hitting a four-decade high over the summer, the Labor Department said last month. It will release November’s consumer-price index on Tuesday, Dec. 13.
The Federal Reserve has aggressively raised interest rates this year to cool the economy and combat high inflation. Fed officials have signaled plans to raise their benchmark interest rate by 0.5 percentage point next week, following 0.75-point increases at each of their past four meetings—bringing it to a range between 3.75% and 4%.
“This is going to be a complicated process, not a flip-the-switch scenario for the Fed,” said
Lindsey Piegza,
chief economist for
Stifel Financial.
“We’re consistently under-evaluating, or under-appreciating, the stickiness of inflation.”
Fed Chair
Jerome Powell
has indicated that strong consumer demand, a tight labor market, and persistent price pressures could lead officials to raise rates next year to slightly higher levels than they had projected in September. That month, most estimated that the fed-funds rate would rise to between 4.5% and 5% in early 2023.
PPI captures what suppliers are charging businesses and other customers. The measure generally reflects changes in costs that producers are facing combined with the pricing power they command—which, in turn, can signal a buildup of inflationary pressure throughout the production pipeline.
The core PPI—which excludes often-volatile food, energy and supplier margin categories—rose 4.9% in November from a year ago, down from 5.4% in October. On a monthly basis, core PPI rose 0.3% in November from the prior month, up from 0.2% in October.
—Gwynn Guilford contributed to this article.
Write to Gabriel T. Rubin at gabriel.rubin@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
U.S. supplier price increases eased in November from rapid gains in the first half of the year, in a sign that inflationary pressures could be moderating.
The producer-price index, which generally reflects supply conditions in the economy, rose 7.4% in November from a year earlier, the Labor Department said Friday. That was down from October’s revised 8.1% increase and well below the 11.7% rise in March, the fastest pace since PPI records began in 2010.
On a monthly basis, the PPI increased 0.3% in November, the same as the prior two months. That was slightly above the average monthly gain in the two years before the pandemic and well below month-to-month gains in the first six months of 2022.
Services price increases drove the November gain, while goods prices rose slightly, the Labor Department said.
Consumer inflation moderated in October after hitting a four-decade high over the summer, the Labor Department said last month. It will release November’s consumer-price index on Tuesday, Dec. 13.
The Federal Reserve has aggressively raised interest rates this year to cool the economy and combat high inflation. Fed officials have signaled plans to raise their benchmark interest rate by 0.5 percentage point next week, following 0.75-point increases at each of their past four meetings—bringing it to a range between 3.75% and 4%.
“This is going to be a complicated process, not a flip-the-switch scenario for the Fed,” said
Lindsey Piegza,
chief economist for
Stifel Financial.
“We’re consistently under-evaluating, or under-appreciating, the stickiness of inflation.”
Fed Chair
Jerome Powell
has indicated that strong consumer demand, a tight labor market, and persistent price pressures could lead officials to raise rates next year to slightly higher levels than they had projected in September. That month, most estimated that the fed-funds rate would rise to between 4.5% and 5% in early 2023.
PPI captures what suppliers are charging businesses and other customers. The measure generally reflects changes in costs that producers are facing combined with the pricing power they command—which, in turn, can signal a buildup of inflationary pressure throughout the production pipeline.
The core PPI—which excludes often-volatile food, energy and supplier margin categories—rose 4.9% in November from a year ago, down from 5.4% in October. On a monthly basis, core PPI rose 0.3% in November from the prior month, up from 0.2% in October.
—Gwynn Guilford contributed to this article.
Write to Gabriel T. Rubin at gabriel.rubin@wsj.com
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8