Wholesale Inflation Report November 2023: Prices Hold Steady Below Expectations
In November 2023, wholesale inflation remained steady with prices unchanged, defying economists' predictions of a slight rise. Core prices showed a modest increase as gas prices dropped and some food costs surged.
Highlights from November 2023 Wholesale Inflation Data
- The Producer Price Index (PPI) for November 2023 revealed no change in wholesale prices, surpassing economists' forecast of a 0.1% increase.
- Excluding volatile food and energy sectors, core PPI edged up by 0.1% month-over-month, contributing to a 2.5% rise year-over-year.
- Gasoline prices declined sharply by 4.1%, while egg prices soared by 59%, marking notable shifts in key commodity costs.
Wholesale inflation in November 2023 held steady, diverging from the previous month's decline, yet remained below expert expectations. This stability reflects the cost trends for retailers and service providers purchasing goods.
Despite no overall change in the PPI, the result was better than the predicted 0.1% increase. This comes on the heels of a Consumer Price Index (CPI) report showing retail inflation easing to 3.1% over the past year ending November.
Core PPI, which excludes the volatile food and energy components, posted its sixth consecutive monthly rise with a 0.1% increase in November. Year-over-year, the overall PPI increased by 0.9%, while core PPI saw a stronger 2.5% gain.
Federal Reserve Monitors Inflation Amid Falling Gas Prices
The Federal Reserve continues to scrutinize inflation indicators as prices gradually approach the 2% target rate. After peaking at 9.1% in June 2022—the highest since the early 1980s—inflation has steadily declined, influenced by multiple interest rate hikes.
Gasoline prices fell another 4.1% in November, following a steep 15.3% drop the previous month. Overall energy costs decreased by 1.2% for the second consecutive month, with gas prices dipping below $3 in many U.S. regions. However, utility expenses for natural gas and electric power experienced slight increases.
Some wholesale food prices climbed in November, notably eggs jumping 59%, along with fresh fruits and melons. Additionally, traveler accommodation services—including hotels, dining, laundry, and recreation—rose by 4%.
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