U.S. Producer Prices Hit 0.2% Monthly Gain in November—Annual Inflation Picks Up Pace

U.S. inflation pressures on the producer side shifted into higher gear as latest Labor Department figures reveal a story of accelerating price growth. The producer price index for final demand ticked up by 0.2 percent month-over-month in November, a slowdown from October’s 0.1 percent advance yet perfectly aligned with what market analysts had penciled in. More notably, the year-over-year inflation reading surprised to the upside—jumping to 3.0 percent versus October’s 2.8 percent, beating economist forecasts of 2.7 percent growth.

Energy Swings Drive Price Momentum

What fueled November’s producer price uptick? Energy proved to be the primary driver, rebounding sharply after a brutal October. The sector spiked 4.6 percent in November following a 3.2 percent nosedive the prior month. This volatile swing underscores how sensitive producer inflation remains to commodity market gyrations.

Strip out the volatile energy, food, and trade services components, and a more persistent inflation narrative emerges. Core producer prices advanced 0.2 percent in November—a deceleration from October’s 0.7 percent gain. Yet on an annualized basis, core PPI crept higher to 3.5 percent in November from 3.4 percent previously, signaling underlying cost pressures are broadening.

Consumer Prices Keep Step With Expectations

On the consumer side, price growth remained benign and predictable. The consumer price index climbed 0.3 percent in December, precisely matching economist consensus. Core CPI, excluding food and energy, rose just 0.2 percent—slower than the 0.3 percent increase analysts were banking on, a modest miss that may ease some inflation concerns on Main Street.

The annual consumer price growth held steady at 2.7 percent year-over-year in December, mirroring November’s pace and aligning with market expectations. Core annual inflation similarly held ground at 2.6 percent, though economists had been bracing for an uptick to 2.7 percent—another silver lining for those concerned about runaway price pressures.