Producer Inflation Rises in the US

The US Labor Department announced the Producer Price Index data for December 2024. Accordingly, the PPI increased by 0.2% compared to the previous month. The market expectation was for producer prices to increase by 0.4% on a monthly basis in November 2024, just like the previous month. The annual increase in producer prices was 3.3% last month. Producer inflation hit its highest level on an annual basis since February 2023, with an expected 3.5% during this period. The PPI recorded a 3% increase on an annual basis in November 2024. The core PPI, which does not include volatile food and energy prices, showed no change on a monthly basis in December 2024 but increased by 3.5% annually. The market expectation was for core producer inflation to increase by 0.3% on a monthly basis and 3.8% annually. Core producer prices had increased by 0.2% on a monthly basis and 3.5% annually in November 2024. The PPI provides clues about final product prices and headline inflation by measuring the prices of inputs used in production. The Federal Reserve Bank of the United States is monitoring all inflation indicators, including the PPI.