Services and goods push US producer prices up in November

Shoppers browse a Home Depot building supplies store while wearing face masks to help slow the spread of coronavirus disease (COVID-19) in northern St. Louis, Missouri, United States, April 4 2020. REUTERS / Lawrence Bryant / File Photo / File Photo

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  • Producer prices rise 0.8% in November
  • Producer prices soar 9.6% year on year
  • Core PPI increases 0.7%; accelerated by 6.9% over one year

WASHINGTON, Dec.14 (Reuters) – Producer prices in the United States rose more than expected in November as supply constraints persist, resulting in the biggest annual gain since the series redesign 11 years ago, supporting the idea that inflation could remain uncomfortably high for some time.

Tuesday’s Labor Department report, which also showed strong growth in core output inflation, followed last week’s announcement that annual consumer prices had risen the most since 1982 in November. Soaring inflation complicates President Joe Biden’s economic agenda, including a $ 1.75 trillion social and climate program stuck in the US Congress.

Strong price pressure, along with a tightening labor market, will likely see the Federal Reserve announce that it will step up its curtailment of its massive bond purchases when officials end a two-day meeting on Wednesday and begin. potentially to raise interest rates sooner than expected.

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“Price measures have been well above target for much longer than expected,” said Rubeela Farooqi, chief US economist at High Frequency Economics in White Plains, New York. “This data supports the Fed’s move to faster cut that will likely precede faster policy tightening next year.”

The producer price index for final demand jumped 0.8% last month after advancing 0.6% in October. The widespread increase in the PPI was led by a 0.7% rise in services, which followed a 0.2% gain in October. The acceleration in services reflects a 2.9% jump in portfolio management prices.

There have also been increases in the prices of hotel and motel rooms, as well as air fares, freight and mail. But the prices of wholesale furniture and bundled wireline telecommunications services have fallen.

Wholesale goods prices rose 1.2% after increasing 1.3% in October. Prices for scrap metal and steel rose 10.7%. Wholesale gasoline and food prices have also increased. But diesel fuel prices have fallen, as have the cost of light trucks.

In the 12 months to November, the PPI climbed 9.6%. This is the largest gain since November 2010 and follows an 8.8% increase in October.

Economists polled by Reuters predicted the PPI would rise 0.5% on a monthly basis and 9.2% year on year.

The government announced last Friday that the consumer price index had jumped 6.4% in the 12 months to November, the largest year-over-year increase since June 1982. read more following

The COVID-19 pandemic has scolded supply chains, pushing up the prices of goods and services.

Excluding the volatile components of food, energy and commercial services, producer prices rose 0.7%. The core PPI gained 0.4% in October.

In the 12 months to November, the core PPI jumped 6.9%, the biggest gain since 12-month data was first calculated in August 2014. That follows to an increase of 6.3% in October.

The Fed is tracking the personal consumption expenditure (PCE) price index, excluding volatile food and energy components, for its flexible inflation target of 2%.

The core PCE price index jumped 4.1% in the 12 months to October, the highest since January 1991. Data for November will be released later this month.

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Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci

Our Standards: Thomson Reuters Trust Principles.

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