(Dec 12): US wholesale inflation unexpectedly accelerated in November on a surge in egg prices, while other categories suggested a muted increase in the Federal Reserve’s preferred price gauge.

The producer price index for final demand rose 0.4% from a month earlier, the most since June, according to a Bureau of Labor Statistics report released Thursday. The median forecast in a Bloomberg survey of economists called for a 0.2% gain. Compared with a year ago, the PPI increased 3% — the largest advance since early 2023.

A measure excluding food and energy, meanwhile, rose 0.2% on the month and 3.4% from a year earlier.

The wholesale inflation data follow the more closely watched consumer price index, which showed Wednesday that underlying inflation remained firm for a fourth month. The string of hotter numbers follows a rapid moderation earlier in 2024, and has added to uncertainty over the trajectory for prices and interest rates as the incoming Trump administration threatens higher tariffs on imported goods.

Economists pay close attention to the PPI report because several of its components feed into the Fed’s preferred inflation measure — the personal consumption expenditures price index. Those were favorable across the board as health care categories like hospitals, physician services, nursing home services and home health care were little changed.

Portfolio management services — a category that captures fees paid to investment advisers and generally tracks movements in the stock market — fell along with airfares.

While the PCE data won’t be published by the time of the Fed’s policy meeting next week, central bankers will have a good idea of what it will show based on the CPI and PPI reports. They are widely expected to cut their benchmark rate by a quarter percentage point, though forecasters generally see a slower pace of reductions next year after closing out 2024 with rate cuts at three straight meetings.

Separate figures showed first-time applications for jobless benefits increased last week to a two-month high. Continuing claims, a proxy for the number of people receiving benefits, rose in the week that included the Thanksgiving holiday.

The PPI data showed goods prices jumped 0.7%, the most since February. The BLS said more than 80% of the advance was traced to food. Egg prices surged 55% from a month earlier, largely reflecting the impact of bird flu.

Overall services costs in the PPI report edged up 0.2%, the least in four months. Goods prices, excluding food and energy, rose by a similar amount.

Uploaded by Magessan Varatharaja