Wholesale inflation heated up less than expected last month
By Alicia Wallace, CNN
(CNN) — There appears to be some welcome news on the US inflation front.
Price hikes on the wholesale level were much tamer than anticipated in December, according to the latest Producer Price Index released Tuesday, indicating that inflation might not be reaccelerating as much as feared.
However, Tuesday’s positive PPI report may merely be “the calm before the storm,” cautioned economist Chris Rupkey at FwdBonds. President-elect Donald Trump has threatened to unleash a series of steep tariffs on key US trading partners, stoking fears that higher costs will be passed along to American consumers.
“A small victory today on the inflation front, and it is the incoming president-elect’s policies that can either continue the progress on inflation or worsen it,” Rupkey wrote in commentary issued Tuesday.
In December, the Producer Price Index, which measures the average change in prices paid to US-based producers for goods and services, rose 0.2% from the month before and 3.3% for the year ended in December, according to Bureau of Labor Statistics data released Tuesday.
A surge in energy costs was the culprit behind the monthly increase, according to the report. Wholesale energy prices rose 3.5% for the month, driving goods prices and the overall index higher.
In November, prices rose 0.4% for the month — driven higher in part by soaring egg prices — and 3% annually.
A closely watched measure of underlying inflation didn’t budge much at all in December: Core PPI, which excludes volatile food and energy prices, held flat from November and held pat at 3.5% annually.
Although PPI’s annual rate is at its highest point since February 2023, prices didn’t rise as much as anticipated: Economists were expecting PPI to rise 0.3% on a monthly basis and move to 3.4% annually.
This story is developing and will be updated.
The-CNN-Wire
™ & © 2025 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
