The U.S. Bureau of Labor Statistics reported Thursday that wholesale prices rose more than expected in November, adding to perceptions that progress in curbing inflation has slowed.
this producer price indexPrices, a measure of what producers get for products at the final demand stage, rose 0.4% for the month, above the Dow Jones consensus estimate of 0.2%. On an annual basis, PPI rose 3%, the largest increase since February 2023.
However, excluding food and energy, core PPI grew 0.2%, in line with forecasts. In addition, excluding trade services, PPI increased by only 0.1%.
In other economic news Thursday, the Labor Department reported that initial jobless insurance claims totaled a seasonally adjusted 242,000 in the week ended December 7, well above the forecast of 220,000 and up 17,000 from the previous period. people.
On the inflation front, the news is mixed.
The price of final demand commodities increased by 0.7% compared with the previous quarter. This is the biggest change since February this year. About 80% of the increase came from a 3.1% increase in food prices, according to the Bureau of Labor Statistics.
In the food category, eggs soared 54.6%, and commodities such as dried vegetables, fresh fruits and poultry also rose across the board. The U.S. Bureau of Labor Statistics said Wednesday in a separate report on consumer prices that retail egg prices rose 8.2% this month and were up 37.5% from the same period last year.
The producer price index (PPI) was released a day after the U.S. Bureau of Labor Statistics (BLS) reported that the consumer price index, a more widely cited measure of inflation, also edged higher in November, rising 2.7% from the previous 12 months. up 0.3%.
Although inflation looks stubborn, markets overwhelmingly expect the Fed to cut its key overnight borrowing rate next week. Futures market traders are suggesting rates will almost certainly fall by a quarter of a percentage point when the Federal Open Market Committee concludes its meeting on Wednesday.
Stock market futures were in negative territory following the economic news. U.S. Treasury yields were mixed, Possibility of rate cut It’s still around 95% next week, according to CME Group.
One of the reasons the market expects the Fed to cut interest rates even amid stubborn inflation is that Fed officials are increasingly concerned about the labor market. Nonfarm payrolls have grown every month since December 2020, but growth has slowed recently, with news on Thursday suggesting layoffs could increase as job losses linger longer.
Initial jobless claims hit the highest level since early October, while continuing claims rose slightly a week later to 1.89 million. The four-week moving average of continuing claims, which smooths out weekly volatility, rose to its highest level in more than four years.
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