U.S. Producer Prices Show Slight Uptick In December
(RTTNews) - Reflecting a sharp pullback in energy prices, the Labor Department released a report on Thursday showing only a slight uptick in U.S. producer prices in the month of December.
The Labor Department said its producer price index for final demand edged up by 0.2 percent in December after jumping by an upwardly revised 1.0 percent in November.
Economists had expected producer prices to rise by 0.4 percent compared to the 0.8 percent increase originally reported for the previous month.
The uptick in produce prices came as a 0.5 percent increase in prices for services was partly offset by a 0.4 percent drop in prices for goods.
The report said prices for transportation and warehousing services jumped by 1.7 percent, while prices for trade services climbed by 0.8 percent and prices for other services edged up by 0.2 percent.
Meanwhile, the decrease in prices for goods came as energy prices plunged by 3.3 percent in December after surging by 2.0 percent in November. Food prices also fell by 0.6 percent.
Excluding food, energy and trade prices, core producer prices rose by 0.4 percent in December after climbing by 0.8 percent in November.
The report also showed the annual rate of producer growth slowed to 9.7 percent in December from a record high 9.8 percent in November. The yearly core price growth was unchanged at 6.9 percent.
"Persistent supply disruptions will underpin producer prices near record levels in the near term, especially given a rapidly spreading Omicron variant that will fan inflation pressures," said Mahir Rasheed, U.S. Economist at Oxford Economics.
He added, "The PPI data adds to a growing body of evidence that the Fed will commence rate lift-off in March and undergo balance sheet reduction mid-year."
On Wednesday, the Labor Department released a separate report showing the annual rate of consumer price growth once again reached the highest level in almost 40 years in December.
The report showed the annual rate of consumer price growth accelerated to 7.0 percent in December from 6.8 percent in November, showing the biggest yearly jump since June of 1982.
Core consumer prices, which exclude food and energy prices, were up by 5.5 percent year-over-year in December compared to the 4.9 percent spike in November. The annual growth reflected the biggest surge since February of 1991.
The continued acceleration in the annual rate of consumer price growth came as prices increased by slightly more than expected on a monthly basis, although the pace of growth slowed from November.
The Labor Department said its consumer price index rose by 0.5 percent in December following a 0.8 percent advance in November. Economists had expected consumer prices to rise by 0.4 percent.
Core consumer prices increased by 0.6 percent in December after climbing by 0.5 percent in November. Core prices were expected to advance by 0.5 percent.
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