The US producer price index (PPI) rose faster than expected in November. Deep inflationary pressures have been highlighted and the US Fed is expected to raise interest rates towards 2023.
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Bar Graph: PPI, Line Graph: Core PPI
On the other hand, year-on-year growth remained the lowest in the last 18 months and the decelerating trend continues. It also suggests that there is still room for the Fed to halt rate hikes next year. Slowing demand at home and abroad is easing pressure on supply chains.
As for the inflation statistics, the November Consumer Price Index (CPI) released on the 13th is also attracting attention. CPI is expected to slow despite continued high growth.
As core inflation in goods declines, attention is shifting to price growth in services. The housing sector, the main driver of consumer price inflation, is expected to change at some point, with wages likely to be key to the final inflation trajectory.
goods and services
Commodity prices rose 0.1% month-on-month in November, reflecting higher food prices. Prices for services rose 0.4% year-on-year, the fastest growth in three months. Rising costs for securities brokerage and investment advisory services also contributed.
PPI, which excludes food, energy and commercial services, rose 0.3% from the previous month. The year-over-year increase was 4.9%, the lowest growth since April 2021.
A sustained easing of cost pressures has also been demonstrated by other statistics. The November manufacturing index released by the Institute for Supply Management (ISM) on the 1st showed that the input price index has fallen sharply since May 2020.
US ISM manufacturing index drops below 50, activity contracting for first time since May 2020 (2)
See table for detailed statistics.
Original title:Better estimates on US producer prices, supporting Fed hikes through 2023(extract)
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