U.S. Producer Prices Rose Robustly in November
December 12 2017 - 9:00AM
Dow Jones News
By Sarah Chaney and Sharon Nunn
WASHINGTON--A gauge of U.S. business prices rose in November,
pointing to emerging inflation pressure in the economy.
The producer-price index for final demand, which measures
changes in the prices that U.S. companies receive for their goods
and services, increased a seasonally adjusted 0.4% in November from
a month earlier, the Labor Department said Tuesday. This matched
expectations of economists surveyed by The Wall Street Journal.
A jump in gasoline prices pushed up prices for final demand
goods, which accounted for the bulk of the month-over-month rise in
business prices.
Producer prices were up 0.4% in November when excluding food and
energy and a volatile category known as trade services. From a year
earlier, overall producer prices advanced 3.1%, the biggest jump in
nearly six years.
Rising oil prices and improved global demand have helped push up
the index this year.
Producer prices don't necessarily directly translate into what
consumers pay, but in general, PPI readings follow the same trends
as other major inflation gauges, which have remained subdued this
year.
The Fed's preferred inflation gauge rose 1.6% in October from a
year earlier, according to the Commerce Department. That annual
inflation reading has remained below the Fed's 2% target for the
best part of 5 ½ years.
Fed officials are likely to raise their benchmark short-term
rate Wednesday by a quarter-percentage point to a range between
1.25% and 1.5%, but low inflation readings could complicate
officials' decisions on how quickly to raise interest rates in 2018
and beyond.
The Labor Department releases data on the consumer price index
Wednesday. Economists expect this key inflation gauge increased
0.4% in November from a month earlier.
The Labor Department's producer-price index report can be
accessed at: http://www.bls.gov/news.release/ppi.nr0.htm
Write to Sarah Chaney at sarah.chaney@wsj.com and Sharon Nunn at
sharon.nunn@wsj.com
(END) Dow Jones Newswires
December 12, 2017 08:45 ET (13:45 GMT)
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