US producer prices increase moderately in November

WASHINGTON, Jan 14 (Reuters) - U.S. producer ⁠prices picked up ⁠slightly in ‍November amid a surge in the cost of gasoline, but businesses appeared to be absorbing some of the tariffs on imports, with trade margins ‍compressing.

The Producer Price Index for final demand rose 0.2% in November ​after edging up 0.1% in October, the Labor Department's Bureau of Labor Statistics said on Wednesday. Economists polled ​by Reuters had forecast the PPI rising 0.2%.

In the 12 months through November, the PPI advanced 3.0% after increasing 2.8% in October. The reports were delayed by the 43-day shutdown of the government. ​Though the longest shutdown on record prevented the collection of data to produce the Consumer Price Index for October, the government collected information for the PPI for ​that month, but with a delay.

The shutdown has made the CPI data a bit noisy. The government reported on ‌Tuesday that the CPI increased 0.3% in December, lifted by food and rents. Consumer prices rose 2.7% year-on-year in December.

Producer goods prices rebounded ​0.9%, the largest increase since February 2024, after ⁠slipping 0.4% in October. A 4.6% jump in energy prices accounted for more than 80% of the increase in producer goods prices. ‌Food prices were unchanged after dropping 0.4% in October. Excluding food and energy, producer goods prices climbed 0.2% after rising 0.4% in October.

Wholesale services prices were unchanged after advancing 0.3% in October. Margins ‌for trade services dropped 0.8%. Business absorbing some of President Donald Trump's sweeping import tariffs have ‌prevented a sharp increase in inflation.

Prices for bundled wired telecommunications access services soared 4.6% in November. There were also increases in the costs machinery and vehicle wholesaling as well as portfolio management and ‍outpatient care.

The Federal Reserve is expected to keep its benchmark overnight interest rate in the 3.50%-3.75% range at its January 27-28 meeting. ⁠An escalation in tensions between Fed Chair Jerome Powell and Trump has left most economists not expecting a rate cut before Powell's term ends in May. The Trump administration has opened a criminal investigation into Powell, which the Fed chief called a "pretext" to influence rates.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

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