Wholesale inflation in the United States was unchanged in November, suggesting that price increases in the economy’s pipeline are continuing to gradually ease.
The Labor Department reported Wednesday that its producer price index — which tracks inflation before it reaches consumers — was flat from October to November after having fallen 0.4% the month before. Measured year over year, producer prices rose just 0.9% from November 2022, the smallest such rise since June.
Excluding volatile food and energy costs, so-called core wholesale prices were unchanged from October and were up just 2% from a year ago — the mildest year-over-year increase since January 2021. Among goods, prices were unchanged from October to November, held down by a 4.1% drop in gasoline prices. Services prices were also flat.
Wholesale inflation in the United States was unchanged in November, suggesting that price increases in the economy’s pipeline are continuing to gradually ease.
The Labor Department reported Wednesday that its producer price index — which tracks inflation before it reaches consumers — was flat from October to November after having fallen 0.4% the month before. Measured year over year, producer prices rose just 0.9% from November 2022, the smallest such rise since June.
Excluding volatile food and energy costs, so-called core wholesale prices were unchanged from October and were up just 2% from a year ago — the mildest year-over-year increase since January 2021. Among goods, prices were unchanged from October to November, held down by a 4.1% drop in gasoline prices. Services prices were also flat.
The Fed is expected later Wednesday to announce, after its latest policy meeting, that it’s leaving its benchmark rate unchanged for the third straight meeting. Most economists believe the Fed is done raising rates and expect the central bank to start reducing rates sometime next year.
On Tuesday, the Labor Department reported that consumer prices rose just 0.1% last month from October and 3.1% from a year earlier. But core prices, which the Fed sees as a better indicator of future inflation, were stickier, rising 0.3% from October and 4% from November 2022. Year-over-year consumer price inflation is down sharply from a four-decade high of 9.1% in June 2022 but is still above the Fed’s 2% target.
“The data confirm the downtrend in inflation, although consumer prices are moving lower more gradually,″ said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. “For the Fed, there is nothing in today’s figures that changes our expectation that (its policymakers) will hold policy steady today, and rates are at a peak.”
Despite widespread predictions that the Fed rate hikes would cause a recession, the U.S. economy and job market have remained surprisingly strong. That has raised hopes the Fed can pull off a so-called soft landing — raising rates enough to tame inflation without sending the economy into recession.
Source : USNews
