Producer Price Index rises less than expected in December
The Bureau of Labor Statistics showed that its producer price index (PPI) rose 3.3% from the year prior, up from 3% in November but below the 3.5% increase economists had projected. Prices increased 0.2%, below the 0.4% increase economists had expected monthly.
According to the BLS report, core prices, which excludes food, rose 3.5% year over year in December, above November’s 3.4% gain. Economists had expected an increase of 3.8%. Meanwhile, month-over-month core prices were unchanged, below the 0.3% increase economists had expected and the 0.2% gain seen last month.
One economist noted the numbers for December seem encouraging, but it also may mask a few price jumps in key components, such as domestic and international airfare prices that feed into the Fed’s inflation gauge, the Personal Consumption Expenditures (PCE) index, which also increased in December.
Morgan Stanley’s economics team moved up their core PCE inflation forecast for December, stating prices increased 0.23% month over month in December, up from the 0.21% they projected before the release.
Source: Yahoo Finance