US wholesale inflation surged higher in November

CNN
 — 

US wholesale inflation shot higher last month, an unwelcome sign that some prices could be heating up before they come down the pike to consumers.

The Producer Price Index, a measurement of average price changes seen by producers and manufacturers, rose 0.4% on a monthly basis and 3% for the 12 months ended in November, marking an acceleration from October, when prices rose 0.3% and 2.6%, respectively, according to Bureau of Labor Statistics data released Thursday.

October’s monthly and annual rates were both revised higher from their initial estimates.

PPI is at the highest annual rate since February 2023, BLS data shows.

Economists were expecting prices to increase (rising 0.2% from October and 2.6% annually), partly due to unfavorable comparisons to this time last year, when inflation slowed sharply.

However, food prices surged last month by 3.1%, driving the overall index higher. The index for chicken eggs, which soared 54.6% from October was the biggest culprit — accounting for a quarter of the overall monthly jump.

An ongoing deadly avian flu coupled with holiday-based demand has caused shortages and driven egg prices higher.

Food and energy prices also can be incredibly volatile and shift dramatically due to events such as weather or disease. To get a better sense of underlying inflation, economists closely watch “core” measurements of price gauges, which strip out food and energy.

Core PPI moved up 0.2% for the month, slowing from 0.3% in October and landing in line with expectations. On an annual basis, core PPI held at 3.4%. Like the overall PPI, core’s annual rate was also upwardly revised.

PPI serves as a potential bellwether for retail-level inflation in the months ahead. On Wednesday, the latest Consumer Price Index landed in line with expectations but did show that some stagnation in the progress on reining in inflation.

This story is developing and will be updated.