Wholesale costs in the United States picked up sharply last month, according to the Associated Press, signaling that price pressures are still evident in the economy even though inflation has tumbled from the peak levels it hit more than two years ago.
The Labor Department reported today that its producer price index — which tracks inflation before it reaches consumers — rose 0.4% last month from October, up from 0.3% the month before. Measured from 12 months earlier, wholesale prices climbed 3% in November, the sharpest year-over-year rise since February 2023.
Higher food prices helped fuel the November wholesale inflation reading, which was higher than economists had expected.
Excluding volatile food and energy prices, so-called “core” producer prices rose 0.2% from October and 3.4% from November 2023.
The producer price index can offer an early look at where consumer inflation might be headed. Economists also watch it because some of its components, notably health care and financial services, flow into the Fed’s preferred inflation gauge — the personal consumption expenditures index.
